LME three-month copper reached $13,667/t on June 1, consolidating near record territory after a 1.26 percent gain on May 28 to $13,702/t. The rally is driven by intensifying supply disruptions in Chile, where operational challenges and declining ore grades have reduced concentrate output.
Fastmarkets describes the copper market as uniquely strained, with record-high exchange prices reflecting a deep refined-market deficit and treatment charges (TCs) at historic lows below $4/t. The dilemma facing the industry is structural: rebalancing the concentrate market requires smelter production cuts, but that would worsen the refined market deficit and push prices higher.
Demand remains robust despite weak macroeconomic data in China and Europe. Electrification, AI data-center build-out, and defense-related investment are underpinning consumption. LME inventories declined 0.57 percent to 387,300 tonnes on May 28, extending the drawdown trend and signaling ongoing physical tightness.
Analysts at Fastmarkets expect these bullish undercurrents to sustain upward pressure through at least early 2026. The supply-demand imbalance shows no sign of near-term resolution, with regional inventory distortions and intense speculative engagement adding further support.