Copper price holds near record as London warehouse bidding war looms

The London metal market witnessed intense bidding wars last Friday, with spot contracts soaring 370 dollars per tonne over September's futures, marking the highest one-month spread in five years. The cash-to-three-month spread reached a record high of 434 dollars per tonne, while the benchmark copper price hit a near-record $14,500 per tonne. In New York, Comex copper for September delivery remained flat at $6.59 a pound, nearly $400 above the LME three-month price, nearing a record of $6.7140 from the previous day.

Warehouse stockpiles in London tumbled for the 42nd consecutive day in the week, with only 204,975 tonnes remaining. A significant portion of these reserves has already been earmarked for withdrawal, leaving little recourse for the physical trade. Given their status as a last-resort source of supply, "short futures position holders" are likely to engage in a "bidding war" to compel "holders of inventories and expiring long positions to sell."

Congo's copper ban has contributed to the market turmoil, with traders shipping metal to the US ahead of potential tariffs and to China, where smelters are curtailing output due to tight feedstock supplies following the DRC's restriction on concentrate exports. Andy Home, writing for Reuters, emphasized that the market's reaction to this ban is more indicative of copper's sensitivity to supply disruptions than the ban itself.

BMI forecasts the annual average copper price for 2026 to approach $13,500 per tonne, up from $12,700 previously. The research house sees strong upside risks, but Washington's tariff decisions remain the most immediate catalyst for price movements. A phased approach of 15% from 2027 and 30% from 2028 could bolster prices in the second half, while a policy reversal could put downward pressure on prices. Despite the current cooling of copper equities, they remain significantly higher than the metal itself.