Copper Holds Near $14,000 as Record Rally Cools on Tariff Delay and Negative Treatment Charges
Copper retreated from a record LME cash close of $14,737 a tonne on 8 September to about $14,238 three sessions later after the White House delayed a refined copper tariff decision, but inverted treatment charges and a 1.1% first-half drop in global mine output point to a structural deficit the inventory unwind does not fix.
Copper's record run stalled in the second week of September. LME cash settled at a record $14,737.00 a tonne on 8 September before easing to $14,238.50 by 11 September, a 3.4% drop in three sessions, while the cash premium over the three-month price collapsed from $207.50 a tonne on 11 August to $5.50 on 11 September as the squeeze unwound. COMEX front-month copper settled at $6.4315 a pound on 16 September, up 0.99%, and December futures traded between $6.4380 and $6.6230 on 17 September before closing near $6.61, up more than 1.6%. The trigger for the reversal was policy rather than supply: a White House proposal to impose refined copper tariffs stalled on concerns about domestic manufacturing costs, and no Section 232 proclamation on refined copper had appeared through 13 September.
The physical side argues the deficit is real. Global copper mine output fell about 1.1% in the first half of 2026 and concentrate production dropped roughly 2.6%, putting the sector on track for its first full-year mine supply decline since 2017. ICSG data released on 21 August shows a 131,000-tonne refined surplus for January to June but a 60,000-tonne deficit for June alone, and a DR Congo concentrate export ban has been in force since 6 August. Spot treatment and refining charges have inverted deep into negative territory, reported near minus $127 a tonne by mid-2026, meaning smelters effectively pay miners to take concentrate; Asian smelters have responded with unannounced maintenance and lower furnace run rates.
Inventory geography is distorting the visible picture. Traders moved roughly 675,000 tonnes of copper into COMEX warehouses, a record, ahead of expected tariffs, leaving combined LME and Shanghai Futures Exchange stocks below 300,000 tonnes, less than half of COMEX holdings. LME stocks did recover to 234,475 tonnes on 11 September from 214,550 tonnes a month earlier, but remain far below the 367,300 tonnes registered on 11 June. China's refined copper imports fell to about 382,000 tonnes in August, a six-year low for the month, as domestic fabricators resisted record prices.
Demand from electrification and AI infrastructure keeps the balance tight. AI data centres need dedicated step-down transformers, switchgear and heavy copper busbars, while wind and solar installations use four to six times as much copper per megawatt as legacy thermal plants; IEA long-term models point to roughly 42 million tonnes of annual demand by 2040 against an estimated 12 million tonne supply gap. The ICSG projects a 150,000-tonne refined deficit for 2026 and J.P. Morgan puts the gap at 330,000 tonnes. Precious metals moved higher in the same window, with gold quoted at $4,325.30 an ounce and silver at $63.42 on a week-on-week basis to Friday 11 September, alongside nickel at $16,620 a tonne, zinc at $4,105, aluminium at $3,343 and iron ore at $98.68.