Copper Eases Off Record Highs as Comex Holds 69% of Exchange Stocks and Smelter TCs Stay Deeply Negative
Benchmark LME copper ended the week near $14,632 a tonne, up 0.48%, after touching a record $14,875 on September 10, while Comex warehouses held 69% of the roughly 1 million tonnes tracked by global exchanges and imported concentrate treatment charges stayed at minus $224.53 per dry metric tonne.
LME three-month copper traded at $14,606.50 a tonne on September 23, down 1% on the day after testing resistance above $14,800 and within reach of the $14,875 record set on September 10, according to Reuters reporting carried by Mining.com. Comex copper hit a record $6.83 a pound, or $15,057 a tonne, the previous day before retreating. Comex inventories have begun to record modest daily inflows as the US premium over LME edged higher, and Comex warehouses now hold 69% of the roughly 1 million tonnes of copper tracked by global exchanges, leaving the rest of the world short. In the same session LME aluminium slipped 0.5% to $3,248, zinc fell 0.4% to $3,894.50, lead eased 0.9% to $1,918, nickel lost 1.1% to $16,445 and tin dropped 0.8% to $53,765.
The tightness shows up in spreads and warehouse queues. Half of the 252,500 tonnes stored 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 September 14, which RBC Capital Markets read as buyers paying up to secure metal sooner. LME copper is still up 18% year to date and the rally coincides with signs of robust demand in top consumer China ahead of public holidays. Traders were also awaiting an update on contract negotiations with workers at BHP's Escondida mine, a supply-side risk that remains unresolved.
China's physical picture is softer at the margin. A weekly assessment covering September 22-26 put LME three-month copper at $14,632 a tonne, up 0.48% on the week, with SHFE copper at CNY 110,210, up 0.99%. Refined copper bar operating rates jumped 4.08 percentage points week on week to support pre-holiday enamelled wire shipments and consumer-area inventories fell 1.65% to roughly 70,000 tonnes, about half the level of the same week last year. New order intake dropped sharply by Friday, however, as buyers finished holiday procurement at high prices.
The structural squeeze sits upstream. The imported copper concentrate treatment charge held at minus $224.53 per dry metric tonne, down a further $2.64 on the week and negative for over a year, meaning miners are effectively paying smelters to process concentrate. Smelters are losing about CNY 3,441 a tonne on refined output, which is expected to fall short of plan in September.
Elsewhere in the complex, aluminium held a floor with London inventory near multi-decade lows and Shanghai inventory drawing for an eleventh consecutive week, but downstream aluminium processing utilisation was only 62.1%, up 0.2 points despite the holiday restock window. LME zinc closed the week down 0.68% at $3,893.5 even as concentrate treatment charges stayed at historic negative levels and overseas smelter disruptions continued. Nickel rose 1.25% to $16,385 on stainless restocking, while Chinese hot-rolled coil traded at CNY 3,280-3,330 a tonne, down 0.6%, with mills at negative cash margins of about CNY 69 a tonne for HRC and CNY 218 a tonne for rebar.