Copper Retreats From Record $14,875 as US Refined Tariff Doubts Meet Record-Low China Stocks

Three-month LME copper reached an all-time high of $14,875 a tonne on 10 September and then reversed sharply to around $14,330 after reports that the White House was hesitating over proposed tariffs on refined copper because of the cost to US manufacturers. By mid-September the metal had slipped below $14,000 at one point and was steadying near a three-week low as LME warehouse inventories rose and Chinese physical buying improved only marginally. Rising LME stocks eased the extreme tightness that had pushed the cash-to-three-month spread sharply backwardated earlier in the month.

The supply side remains genuinely tight. ICSG data show global copper mine production fell 1.1% year on year in the first half of 2026, with concentrate output down 2.6%, while world refined copper apparent consumption rose 2.3%. Freeport-McMoRan has said 2026 copper and gold output from PT Freeport Indonesia could be roughly 35% below pre-incident expectations following the Grasberg disruption, with recovery stretching into 2027. Ivanhoe has cut Kamoa-Kakula 2026 production guidance to 290,000-310,000 tonnes from an original 380,000-420,000 tonnes.

Tariff expectations have dislocated inventories geographically. COMEX copper stocks climbed to about 695,600 tonnes in early September while LME stocks fell to roughly 234,200 tonnes as of 3 September, leaving the United States - which consumes only about 6-7% of global copper - holding close to 70% of visible exchange inventory. In China, national social copper inventory fell to 87,500 tonnes and bonded-zone stocks to 38,800 tonnes by mid-September, both at historic lows, although SMM expects a modest rebuild as arrivals recover.

Investment funds were reducing risk into the breakout: LME Commitments of Traders data show investment funds cut net length by 2,498.44 lots in the week to 4 September, trimming 953.45 longs and adding 1,544.99 shorts to leave net length at 45,817.21 lots. Gold, meanwhile, sold off after the Federal Reserve raised its target range by 25 basis points to 3.75%-4.00% on 16 September, its first hike since 2023. Spot gold fell from an intraday $4,367.99 to close near $4,264.28, its lowest since 7 August, before recovering above $4,300 in Asian trade on 17 September, with 16 of 18 officials projecting at least one further hike before year-end.