Copper Market Report

30/08/25

Market Structure

COMEX copper inventories remain elevated, with the latest reported level above

238,000 MT. In the aftermath of unexpected tariff policy announcements, the forward

curve remains sufficiently in contango to be close to full carry economics, somewhere

in the order of $40-50 MT/month. The incentive to move metal back into the LME system

is unlikely to gain traction absent an arb discount of $300 - 400/MT, or other compelling

factors yet to emerge.

On the investor side, LME Copper saw a net reduction of 4,005 contracts, driven by a

mix of long liquidation and fresh short selling. Despite the pullback, net length remains

relatively elevated at around 78 percent of its five-year historical range. SHFE

positioning has turned less bearish in recent sessions; the top 20 brokers having cut

net-short exposure to 731 contracts across the front seven months, down sharply from

3,583 net-short positions in the most active September contract in the previous sample

period. While macro headwinds remain, this shift suggests a subtle improvement in

sentiment within the domestic market.

Concentrate Supply and TC/RC Movements

Treatment and refining charges (TC/RCs) have improved from early-2025 troughs but

remain firmly negative. The rebound has been supported by reports of newly available

prompt units - potentially 60-80 kt entering the market - as well as diverted Indonesian

concentrates due to smelter issues (notably at Gresik). Nonetheless, industry

consensus suggests structural tightness in the concentrate market will endure beyond

any temporary relief.

Supply Dynamics - Regional Flows

Trade flow patterns continue to reflect structural imbalances. African and Indonesian

concentrate exports remain largely oriented toward China, underpinned by long-term

supply agreements and Belt and Road infrastructure links. Chile continues to be a

major refined copper supplier to the U.S. market.

A fresh risk factor has emerged in Chile after a seismic event on July 31 caused a fatal

accident at Codelco’s El Teniente mine, one of the world’s largest underground copper

operations. The tremor damaged the newly developed Andesita section, halting all

production. El Teniente typically accounts for around a quarter of Codelco’s total

copper output, and a one-day suspension equates to roughly 750 tons of lost

production. If authorities require the mine to remain offline pending a full safety review,

the disruption could tighten global supply further and intensify pressure on Codelco,

which is already contending with declining grades and high capital commitments.

Policy and Capacity Outlook

The recent U.S. tariff shifts are not expected to materially increase domestic smelting

or refining capacity in the near term. Lead times for permitting, construction, and

commissioning mean that new facilities would take at least two years to come online,

and more realistically five or more years for significant capacity.

External Sources Referenced in this Report

Market Structure & Inventory Data

COMEX and LME copper inventory figures compiled from Bloomberg, CME Group warehouse reports, and industry tracking services (Macromicro, Fastmarkets).

Concentrate Supply & TC/RC Trends

Mysteel and Benchmark Mineral Intelligence reporting on treatment and refining charges, supplemented with market participant commentary on Grasberg and Gresik smelter disruptions.

Policy & Capacity Outlook

U.S. Department of Commerce, Argus Media, and Reuters reporting on U.S. refining and semi-fabrication capacity timelines, alongside public filings from listed copper producers.

Chilean Supply Developments

CRU Group and Bloomberg reports on El Teniente mine suspension, Codelco production updates, and seismic event investigations.

Investor Positioning

LME Commitment of Traders (CoT) report data, Bloomberg positioning summaries, and Shanghai Futures Exchange broker statistics.

Trade Flow & Regional Dynamics

International Copper Study Group (ICSG) trade data, customs import/export statistics, and market commentary from trading desks on African, Indonesian, and Chilean flows.

This article is intended for general information purposes only and reflects the market environment at the time of writing. It does not constitute investment advice, a personal recommendation, or an offer to engage in any trading activity. The content does not take into account individual objectives or circumstances and should not be relied upon as the basis for any investment decision. Past performance is not a reliable indicator of future results.

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