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Copper slipped, with flows into the London Metal Exchange’s global warehousing network surging as traders unwind massive bets on US President Donald Trump’s tariffs.
The red metal fell after LME data showed readily available copper inventories jumped by 14,350 tons to 141,850 tons, the highest since March, driven by inflows into facilities in South Korea and Taiwan.
Trump’s unexpected decision to spare refined copper from his 50% tariff sent US prices plunging last week, leading traders to start re-exporting some of the record shipments they sent to American shores in a bid to gain from higher prices. These flows have gripped the market’s attention, overshadowing supply concerns from a deadly accident at Chilean mining giant Codelco’s El Teniente mine.
“Although copper participants are also watching developments at Codelco’s El Teniente, where operations remain halted after last week’s earthquake, that does not seem to be troubling the market for now,” Ed Meir, a metals analyst for Marex Capital Markets wrote in a note. “Expectation is that production will resume shortly.”
For months, traders had fallen over one another to ship copper to the US to capture sharply higher prices. They rapidly built up a stockpile worth more than $5 billion spread across US ports. Now the same traders are looking for new homes for some of that metal, triggering a race for LME storage space.
In Chile, six people were killed in a tunnel collapse triggered by an earth tremor last week at El Teniente, which accounts for over a quarter of Codelco’s output. Underground operations are halted and — with the company launching an investigation into the causes — it’s unclear how long the stoppage will last or whether it will trigger changes to Codelco’s output goals.
El Teniente, one of the world’s biggest underground mines, produced 356,000 tons of copper last year. That volume is equivalent to more than a month of Chinese imports of refined copper.
LME copper prices fell 0.5% to settle at $9,638.50 a ton at 5:50 p.m. local time. Other metals were mixed, with zinc up 0.3% and nickel down 0.3%.
(By Jack Ryan)