Copper futures on the London Metal Exchange rose 1.2% to settle at ₹1,413.45 per metric ton, driven by intensifying supply disruption concerns. According to latest reports, Chilean copper production fell 12.8% year-on-year in August to 369,500 tonnes, marking the lowest monthly output since February 2011. The strike at Antofagasta Plc's Centinela mine has intensified as workers voted to strike, with the walkout expected to start affecting copper output within approximately two weeks. While the operation has maintained feed to its processing plants, much of its mine movement and development has stopped, as confirmed by the unions. As per StoneX analysts, traders are monitoring this strike at one of Chile's largest mines, which could significantly impact global copper supply.
The Chilean strike adds to a series of mine disruptions that have tightened the copper supply outlook. As reported by Bloomberg, supervisors at BHP Group's Escondida, the world's biggest copper mine, remain in government-mediated wage talks after voting for a walkout. The situation has further deteriorated as supervisors at Escondida have now rejected a collective contract offer, raising the risk of further disruptions. Despite these supply pressures, Antofagasta earlier stated that projected production remained unchanged, indicating the company's ability to manage operational challenges. According to StoneX analysts, supply risks continue to support copper prices, with the metal consolidating just below record levels amid persistent supply tightness.
China's manufacturing activity showed significant improvement in September, with the official PMI rising to 50.1 from 49.8, while the RatingDog PMI climbed to a five-month high of 52.1 from 51.5, indicating stronger industrial activity. China's domestic physical premium eased to 1,050 yuan per tonne from 1,375 yuan, while the Yangshan import premium rose to $119 per tonne. Copper inventories in Shanghai Futures Exchange warehouses declined 17.8% week-on-week to 38,744 tonnes, the lowest since January 2024, as pre-holiday demand supported withdrawals. Following China's national holiday, inventories in the top consumer are low, meaning restocking may take place in the weeks ahead, with a gauge of import demand hitting a four-year high.
Copper's gains were tempered by a stronger dollar and broader weakness across global markets. According to Bloomberg reports, US stocks retreated from record highs while Treasury yields remained near their highest levels since 2002. The dollar strength and risk-off sentiment in global markets provided headwinds for the copper rally, limiting the extent of price increases despite supply concerns. However, fading prospects for a US Federal Reserve rate hike have helped offset some of these headwinds. Minutes from the Federal Reserve's September meeting showed unity around its decision to raise interest rates, with most investors betting on an additional hike at the bank's December meeting rather than later this month, which typically negative for copper demand.
Bank of America has raised its 2031 copper price forecast by 20% to $13,577 per tonne, citing tightening supply outside the US and persistent market tightness in China. Morgan Stanley analyst Amy Gower expressed a more neutral outlook on LME copper given its recent catch-up to Comex prices. She noted that any slowdown in US stockpiling could make the market feel looser, while highlighting that China's demand has remained resilient and mine supply is facing significant disruptions. StoneX analysts remain constructive for copper, supported by supply risks, seasonal Chinese demand and continued tariff uncertainty, though they acknowledge downward risks from sticky inflation and hawkish central banks. Traders are also assessing whether US stockpiling that helped fuel copper's recent rally will persist, with Washington taking longer than expected to decide on possible tariffs on refined copper.
Technically, the market is under fresh buying pressure, with open interest rising 0.19% to 8,308 while prices gained ₹2.95. Copper has support at ₹1,410, and a break below could test ₹1,406.4. Resistance is placed at ₹1,416.9, and a sustained move above this level could push prices toward ₹1,420.2. Copper rose 1.2% to $14,474.50 a ton on the LME at 10:36 a.m. in Singapore, putting it on track to finish the week about 1.5% higher. All other major contracts advanced, led by tin, which added 1.5%, showing mixed performance across the metals complex. Attention now turns to China's reopening Thursday after a weeklong holiday, which should provide fresh signals on demand from the world's biggest metals consumer.
