Copper price jumps on tightening supply, mining stocks rally

Copper climbed on Thursday as mounting evidence of a tight physical market and relief that the US Federal Reserve left interest rates unchanged outweighed Beijing’s reluctance to launch fresh stimulus.

Copper for September delivery, the most active contract on the Comex market in New York, jumped as much as 2.9% to $6.4930 a pound on Thursday, and was still up 2.2% at $6.4515 ($14,224 a tonne) by late morning. The red metal has gained more than 14% so far in 2026, and Thursday’s high brought it within about 2.5% of the record set in early June, when the most active contract moved above $6.60.

Copper on the LME gained 1.3% to $13,753 a tonne in early afternoon London trade, leaving the US premium over the global benchmark at around $470 a tonne.

Signs of tightness are multiplying. Nearby LME contracts traded at a premium of about $24 a tonne over three-month futures, a condition known as backwardation that signals near-term scarcity, after the spread spent most of the year at a discount. LME inventories have fallen by more than 10,000 tonnes this week to 262,300 tonnes, and China’s import premiums last week hit their highest level since 2022.

The squeeze comes as supply problems pile up. Codelco this week effectively abandoned its longstanding goal of returning production to pre-pandemic levels, with new chairman Bernardo Fontaine saying there is “no possibility” of reaching a previous target of 1.7 million tonnes within five years, and warning of another difficult year for production at the world’s largest copper miner, which in March guided 2026 output of no more than 1.357 million tonnes.

Deadly storms that swept Chile this month have added to disruptions, and the International Energy Agency warns that sulphuric acid shortages put more than a seventh of global output at risk. The main relief in sight is Cobre Panama, where First Quantum’s restart momentum is building.

Fed splits, Beijing waits

The Fed’s decision to hold was not unanimous: three of the 12 policymakers favoured a quarter-point hike to fight inflation risks fanned by the US-Iran war. Higher borrowing costs typically weigh on growth and demand from metal-consuming industries, and base metals had traded cautiously ahead of the meeting.

In China, top officials struck a more supportive tone on the economy at Thursday’s Politburo meeting but stopped short of announcing new measures. The government will “plan to roll out pragmatic and effective new policies in a timely manner,” Xinhua reported. A package of spending on manufacturing and consumption would be a boon for industrial metals, but the world’s biggest consumer has so far held back despite an abrupt slowdown.

Earnings sweep

Copper miners rallied in New York morning trade, helped by an earnings season showcasing the metal’s margins. Teck Resources rose as much as 6.1%, matched by merger partner Anglo American, which reported first-half results buoyed by record copper prices and raised its dividend. Glencore gained as much as 4.6% after reporting a 15% rise in first-half copper output, Freeport-McMoRan climbed as much as 4.1% and Southern Copper 3.7%. Rio Tinto, which posted its best first-half earnings in four years on its growing copper exposure, added as much as 3.3%, while BHP was up 3% at its high.

Most metals on the LME are heading for modest monthly gains in July, with tight physical markets offsetting macroeconomic and geopolitical headwinds. Comex copper is up about 4% for the month.

(With files from Bloomberg)