Copper Clinches Weekly Gain as Centinela Strike Escalates and LME Stocks Hit Six-Week Low

Three union members at Antofagasta's Centinela copper mine in Chile began a hunger strike on Friday as labour leaders pressed the company back to the negotiating table, a tactic with precedent at Codelco operations in 2020 and a 27-day action at BHP's Escondida in 2015. About 709 workers, roughly 22% of Centinela's own workforce, are on strike, and unions project copper output could fall by about 50% in November if the stoppage continues. Antofagasta has maintained its production guidance, arguing that pay and benefit differences stem from separate collective agreements negotiated at different times, and has offered a 2% real increase in base salaries plus a cash bonus of almost $23,000 per worker. Separately, mine supervisors at Escondida are in mandatory mediation with BHP to avert a strike that could begin Tuesday, adding a second Chilean supply risk.

Price action reflected that risk. Three-month copper on the London Metal Exchange rose 1.6% to settle at $14,540 a tonne on Friday, a 2% weekly gain, after touching a record near $15,000 a tonne last month. The Yangshan premium, a gauge of Chinese appetite for imported copper, ended the week at $135 a tonne, a four-year high, as the country returned from a week-long national holiday. LME-registered copper stocks fell to a six-week low of about 233,000 tonnes after net outflows, while Shanghai Futures Exchange warehouses held 58,744 tonnes, up 20,000 tonnes from end-September but from a very low base. COMEX inventories stand at a record 711,609 tonnes as metal keeps flowing into the United States ahead of potential import tariffs.

The rest of the complex was mixed rather than broadly strong. Aluminium slipped 0.1% to $3,048.50 a tonne and nickel edged 0.4% higher to $15,622, while zinc gained about 2.4% to near $3,802 and tin rose roughly 2.9% to about $53,000, leaving the post-holiday recovery looking selective. Spot gold rose 1.7% and silver 3.1%, with gold reclaiming $4,180 an ounce and silver approaching $61 as softer Treasury yields and a weaker dollar drew buyers back after the week's heavy selling. StoneX analysts said they remain constructive on copper on supply risk, seasonal Chinese demand and continued tariff uncertainty, while flagging sticky inflation and hawkish central banks as downside risks.

The setup is one where supply risk is preventing a deeper correction rather than driving a fresh breakout: copper's inability to hold above $14,600 on Friday suggests the market has largely priced the Chilean disruption. Any slowdown in US stockpiling could make the market feel looser, but Morgan Stanley noted that Chinese demand has been resilient and supply is facing significant disruptions. A sustained move higher probably requires confirmation of stronger Chinese physical activity, which aluminium's slide toward $3,050 and nickel's continued weakness say has not yet arrived.