Copper inventories across London Metal Exchange warehouses held at 352,150t as of mid-June, the highest level since early April. The stock buildup was driven by a 12% month-on-month decline in Chinese refined copper imports to 278,000t in May, according to customs data. Spot premiums in Shanghai fell to $18/t over LME cash, the narrowest since March, confirming weak near-term demand from the world's largest consumer.
Global refined copper output continues expanding. The International Copper Study Group (ICSG) estimates 2026 refined production at 28.5 million tonnes, a 3.2% increase year-on-year, supported by new smelting capacity in China and the Democratic Republic of Congo. Mine supply grew just 1.8% in the first quarter, meaning smelters are drawing on concentrate stockpiles built up in 2025.
Concentrate treatment charges (TCs) remain depressed at $8-12/t, signaling tight raw material availability. Historically, sustained TCs below $15/t precede refined output cuts within 3-6 months. On the demand side, Chinese wire and cable output rose 4.1% year-on-year in May, though property-sector copper use remains weak.
The base case for the second half of 2026: LME copper averages $13,000-13,800/mt, with inventory trends as the deciding variable. A stock draw below 320,000t would signal tightening. Above 380,000t, downside risk to $12,500 increases.
Copper inventories above 350,000t give buyers leverage in spot negotiations. The Shanghai premium compression to $18/t confirms that physical demand is not absorbing current supply. Fixed-price contracts for Q3 delivery at $13,000-13,200/mt offer protection if concentrate tightness forces smelter cuts in Q4. Track LME stocks weekly.