LME Base Metals Slide as Copper Eases From Record and Aluminium Leads Weekly Losses
London Metal Exchange base metals fell across the board in the week ended 2 October, with aluminium down 5.1 percent and copper down 2.5 percent, although copper's nearby spread flipped to a premium and exchange stocks stay heavily earmarked.
Base metals on the London Metal Exchange closed lower across the complex, extending a pullback from the record territory copper tested earlier in September. Three-month copper ended the latest session at $14,258 a tonne, while aluminium settled at $3,100 and zinc at $3,710, according to daily settlement data. For the week ended 2 October, aluminium led the complex lower with a 5.1 percent drop to $3,101 a tonne, zinc fell 4.8 percent to $3,711, lead declined 4.0 percent to $1,852, and copper slipped 2.5 percent to $14,259.
The retreat follows an exceptionally strong run. Copper touched $14,833 a tonne on 22 September, its highest since the record $14,875 set on 10 September, before a firmer dollar and profit-taking knocked it back to $14,606.50. Comex copper separately hit an all-time peak of $6.83 a pound, equivalent to about $15,057 a tonne, on the same week, and Comex warehouses now hold 69 percent of the roughly 1 million tonnes of copper tracked by global exchanges, which leaves the rest of the world visibly short of metal.
Physical tightness has not fully eased despite the price correction. Half of the 252,500 tonnes sitting in LME-registered warehouses has been earmarked for delivery, and the cash-to-three-month spread swung to a premium of $65 a tonne from a discount of $86 on 14 September, a structure RBC Capital Markets read as buyers paying up to secure metal sooner. LME copper is still up about 18 percent year to date, supported by robust Chinese demand ahead of the 25 September and 1-7 October public holidays.
Supply risk remains the main upside swing factor. Traders are awaiting an update on contract negotiations with workers at BHP's Escondida mine in Chile, the world's largest copper operation, while a Reuters report that the White House had yet to decide on copper import tariffs triggered a sharp pullback in the Comex premium over LME prices. In secondary markets the tone is softer too, with UK-origin Zorba 95-5 aluminium scrap down $45 a tonne on the week to $2,695 and Delhi P1020 ingot falling 2.3 percent.