Copper Falls as Inventories Ease Supply Concerns

Copper futures fell to around $6.55 per pound on Monday, retreating from recent gains as a sharp build-up in exchange inventories eased concerns over near-term supply tightness. LME-monitored copper inventories stood at 238,575 tons on August 20, about 16% above their February low, while SHFE-monitored stocks jumped 28.4% last week to 89,548 tons. The rise in inventories, along with a sharp narrowing in the LME cash premium over three-month copper, pointed to improved near-term availability and weighed on prices. Meanwhile, Zijin Mining warned that flooding at the Kamoa-Kakula copper complex in the Democratic Republic of Congo could reduce its share of production by as much as 57,000 tons this year, highlighting continued risks to global supply. A weaker US dollar helped limit the decline, while investors await the Jackson Hole meeting and the Federal Reserve Chair’s speech for clues on interest rates.

Copper futures climbed above $6.5 per pound on Friday, recovering losses from earlier in the week as tight physical supply continued to underpin prices. The copper market remains vulnerable after months of outflows, partly due to metal being diverted to the US ahead of anticipated tariffs. Top producer Chile also expects copper output to decline this year as ongoing disruptions continue to weigh on mines and development projects. However, a recent increase in metal deliveries to London Metal Exchange warehouses helped ease a historic supply squeeze. Elsewhere, copper prices were supported by a weaker dollar as skepticism over the US government’s bond buyback plan reduced the greenback’s appeal, boosting demand for metals and other currencies. Meanwhile, investors continued to monitor geopolitical developments as the US prepares sweeping new economic sanctions against Iran, pushing oil prices higher and adding to inflation concerns.

Copper futures held a recent decline to trade around $6.46 per pound as a pickup in metal deliveries to London Metal Exchange warehouses helped relieve a historic supply squeeze. LME copper inventories climbed by 20,000 tons on Tuesday, marking their biggest daily increase since April, with Trafigura Group reportedly responsible for a substantial portion of the inflows. Copper had rallied to record highs earlier this month as tightening global supply fueled gains, largely reflecting an arbitrage trade ahead of potential US import tariffs. Meanwhile, top producer Chile expects copper output to decline this year as ongoing disruptions continue to affect mines and development projects. The broader metals complex also faced pressure from elevated global bond yields and firmer oil prices, keeping inflationary pressures and interest rate risks at the forefront of investor concerns.