[REVISION HISTORY]

Copper prices hit record highs amid supply and smelting woes

Updated 34 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-14 03:21 UTC → 2026-09-14 13:52 UTC · added ~~removed~~

Copper prices reached historic highs in September 2026, with LME 3-month contracts exceeding US$14,500–$14,800 per tonne. This surge is driven by a structural market deficit caused by declining ore grades and rising demand from electrification, renewable energy, and AI data center infrastructure. ~~While high prices support national budgets in Chile~~ Hyperscale AI facilities operated by companies such as Amazon, Alphabet, and ~~Peru, the market faces significant volatility. Recent~~ Meta may require up to 50,000 tonnes of copper per installation for power distribution and cooling. S&P Global predicts global copper demand could increase by approximately 50 percent by 2040. Market volatility has been heightened by US inflation data, ~~showing~~ which showed a 3.4 per cent year-over-year ~~increase,~~ increase. This has ~~heightened~~ led to market expectations of approximately 85-88 per cent probability for Federal Reserve interest rate hikes, contributing to price pullbacks. Additionally, speculative hoarding in the US due to potential import tariffs and a nearly 40 per cent drop in LME warehouse stocks since late May have added pressure. A critical paradox ~~has emerged~~ persists in the smelting sector: global smelting margins have collapsed. The 2026 benchmark treatment and refining charge fell to $0 per ton, with some spot rates turning negative, forcing smelters to pay miners to process ore. This squeeze stems from a mismatch between massive smelting capacity, concentrated largely in China, and a shrinking pool of available concentrate. Supply constraints continue to intensify. Chile reported its weakest second-quarter output in 19 years, ~~and disruptions~~ exacerbated by extreme weather events like El Niño. Disruptions have also been noted in the Democratic Republic of the Congo and ~~Indonesia. Additionally,~~ Indonesia, while the Cobre Panama mine remains closed due to legal disputes. These factors align with International Energy Agency (IEA) warnings regarding high-risk supply shortfalls for this critical mineral. In the corporate sector, Antofagasta reported strong first-half 2026 revenues but saw stock pressure following a reduction in its 2026 production guidance. Meanwhile, India’s projected demand growth continues to favor producers like Vedanta Limited.

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