Copper rebounds on supply concerns but heads for worst week since April

Copper prices recovered slightly on Friday as tightening supply supported the market, but earlier losses left the metal on track for its steepest weekly decline since April.

 

Three-month copper on the London Metal Exchange rose 0.32% to $14,289 per metric ton by 0300 GMT, but remained down 2.28% for the week.

 

Supply concerns have intensified after Chile, the world’s largest copper producer, reported a 12.8% year-on-year decline in output in August. At the Escondida mine, the world’s largest copper operation, supervisors rejected a collective contract proposal, raising the possibility of a strike.

 

Analysts said declining production reflects broader challenges facing the mining industry, including aging infrastructure and difficult operating conditions.

 

Chinese inventories are also tightening. Stocks monitored by the Shanghai Futures Exchange fell to 38,744 tons, their lowest level since January 2024, highlighting limited availability in the world’s largest copper-consuming market.

 

However, supply pressures were outweighed by a stronger US dollar, which reached a 17-month high amid a global bond selloff driven by persistent inflation concerns and elevated government debt.

 

A stronger dollar makes dollar-denominated commodities more expensive for buyers using other currencies, while rising global borrowing costs could weaken economic activity and demand for industrial metals.

 

Among other LME metals, aluminium fell 0.18%, zinc gained 0.15%, lead rose 0.03%, nickel declined 0.19%, and tin dropped 0.72%.