Copper price rises on mine struggles, Goldman bull flag

[Ben Graham]

Copper climbed nearly 2% on Thursday as one of the world’s top miners gave a conservative production outlook, adding to the metal’s supply concerns in a year marred by global disruptions.

Prices surged as much as 1.7% to above $10,800 per tonne on the London Metal Exchange, while three-month contracts on the COMEX gained 1.9% to $5.10 per lb., equivalent to $11,250/t.

The metal used in wiring for renewable energy, electronics and construction has rallied more than 20% this year, supported by a series of major global mine outages and production setbacks. Prices have been on the rise since August following major incidents at Chile’s El Teniente, the world’s largest underground mine, and Grasberg in Indonesia within the span of a month.

In a further exacerbation of supply worries, Chile’s Antofagasta, one of the largest copper producers globally, said on Thursday that it expects to hit the low end of its 2025 production target and gave a production forecast for next year that missed analysts’ estimates.

The miner’s “operational update was mixed overall versus our expectations,” analysts at BMO Capital Markets said in an emailed note to Bloomberg. “Maiden 2026 copper production guidance may disappoint slightly.”

Goldman boost

In a further boost to copper prices, Goldman Sachs pointed to a near-term bullish view among traders.

The bank, citing industry players it spoke with during the recent LME Week conference in London, signalled that prices may test all-time highs again over the coming months, as some investors are planning to add to their positions once prices breach $10,900/t.

The view is backed by the huge arbitrage opportunity created by US import tariffs on copper, which drove prices in New York to an all-time high of $5.732 per lb. back in July.

US futures on the COMEX exchange are still trading at a premium over London prices that are the global benchmark, and the metal is flowing to America, according to Bloomberg.

“In the near-term, we see the positive COMEX-LME arbitrage as having a material tightening impact on the physical ex-US market and posing temporary upside risk to our LME copper price forecast range of $10,000-$11,000,” Goldman analysts including Eoin Dinsmore wrote in a note.

Zinc squeeze

Meanwhile, zinc buyers are facing a historic squeeze on the LME as exchange inventories dwindle, but Goldman analysts said it expects shipments from China to replenish reserves.

“The global zinc market is currently balanced, but regional differences have emerged with China in surplus and the rest of world in deficit,” they wrote. “In the near term, clients we spoke with agreed with our view that the China export arb will open to rebalance the global market.”

(With files from Bloomberg)