Copper fell for a third consecutive day on Thursday, its longest losing run since June. Comex copper for December delivery dropped 1.2 percent to 6.581 dollars a pound by late morning in New York, and three month copper in London eased 0.9 percent to 14,360 dollars a tonne, the weakest since October 5, after cash copper had settled at a record 14,822 dollars on Monday. LME inventories have fallen to 228,000 tonnes, down 8 percent since the start of the month, and the most traded Shanghai contract lost 1.9 percent.
Two forces drove the slide. A stronger than expected US inflation print put a Federal Reserve rate hike this month back on the table and lifted the dollar, which hurts metals by cooling demand and raising the cost of holding inventory. At the same time the supply risk premium shrank: Escondida’s supervisors ratified their settlement on Wednesday, and although Centinela’s unions remain on strike and Codelco’s El Teniente open pit is still shut after a landslide, the share of Chilean output at risk has narrowed considerably.
The quieter story is in the spread. December copper in New York settled on Wednesday just 49 dollars a tonne over the London price, down from about 175 dollars on Tuesday. On Macquarie’s arithmetic that prices the odds of a 15 percent US import tariff arriving on schedule in January at roughly 2 percent, against 10 percent at the end of September. Macquarie counts a 223,000 tonne surplus this year and surpluses above 700,000 tonnes a year from 2027, a view the International Copper Study Group broadly shares with a 368,000 tonne surplus forecast for next year. BMO takes the other side, arguing that the near 2 million tonnes held in the United States is relocated strategic stock rather than surplus, and has copper averaging 14,675 dollars a tonne next year.
Producers fell with the metal on Thursday. Freeport-McMoRan and Southern Copper each dropped 2.4 percent, BHP fell 1.4 percent and Rio Tinto 1.3 percent, while Antofagasta was the day’s casualty, down 6.4 percent in London after its 2027 outlook disappointed. Copper recovered to 6.63 dollars a pound in the latest market table close, which sets up the question for next week: whether the selloff was positioning, as the miners’ sharp rebound suggests, or the start of the surplus repricing Macquarie expects.