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Copper prices have risen by about 25 percent on the Comex since the start of the year, with a 10 percent increase on the LME. This uptick comes despite recent market losses according to Commerzbank’s commodity analyst, Barbara Lambrecht.
The recent price drop is attributed to increased market risk aversion and a correction following previous surges. However, improved sentiment in China’s industrial and construction sectors may support copper prices, although ongoing tariff disputes could impact this.
Chilean copper production fell below 400,000 tons in February, down 5.5 percent from the previous year, following a record peak in December at nearly 570,000 tons. Reports indicate low treatment charges in China and tight supply, prompting early maintenance at some smelters.
Mining Challenges In South America
Political protests affecting the Antapaccay mine in Peru and significant delays at the Las Bambas Copper mine’s expansion due to local dissent are also impacting production dynamics.
What we’ve seen is a steady climb in copper values since early January, particularly on Comex, where prices have gained roughly a quarter year-to-date. London’s market has reflected a more tempered increase, rising by around 10 percent. Despite this upward movement, there’s been some recent weakness in prices. Lambrecht, from Commerzbank, pointed to a wave of risk-off sentiment as one of the main triggers, coupled with a natural correction from the strong gains earlier in the season. These dips aren’t necessarily a warning sign, but rather a recalibration after accelerated momentum in previous months.
Now, with indicators from China’s industrial and construction spheres beginning to flash green again, there’s a strong counterbalance that may keep copper supported. The Chinese sector has always played a pivotal role here—when demand pulses from the world’s largest metal consumer, markets tend to pay attention. What’s adding a layer of uncertainty, though, stems from the ongoing trade rifts. The tariff friction, particularly with materials involving the broader green energy space, has the potential to interfere with flows and sentiment in a very direct manner. If tariffs extend to components or raw materials associated with electrical vehicles or renewable build-outs, that could weigh unexpectedly.
Impact Of Global Trade And Supply Shifts
A supply-side perspective offers more concrete push factors. February’s Chilean output fell below 400k tonnes, which marked a rather sharp 5.5 percent dip compared to the same period the previous year. It followed what had been a record-breaking December, so some drop-off was always likely—but this was sharper than many were expecting. This kind of tightening, especially when set alongside lower smelter treatment charges inside China, forms a picture of a squeezed supply chain. It’s no surprise, then, that certain smelters have decided to begin maintenance ahead of schedule—if throughput is down and margins thin, that becomes an easy call.
The situation in Peru only tightens things further. We’ve noticed local unrest continuing to drag down activity at key extraction sites. At Antapaccay, political protests have disrupted operations, while Las Bambas—already plagued by community opposition—remains delayed in its expansion push. These aren’t isolated events; rather, they feed right back into supply pipelines. What’s interesting is how these delays compound with falling Chilean extraction and Chinese logistical adjustments. One doesn’t need a perfect storm to tighten the market—just a few persistent bottlenecks.
From a tactical standpoint, this backdrop isn’t one that lends itself to faded rallies without caution. The market may well digest corrections quickly, given the underlying tightness in raw supply and pockets of demand resilience. Watching how inventory levels shift over the next two to three weeks, particularly at officially monitored warehouses, will offer timely input. Anything showing continued drawdowns, even modest, could well put a floor under prices faster than usual.
We’re starting to see a pattern here—short periods of selling pressure, often driven by macro factors rather than core fundamentals, followed by dips being bought rather briskly. This kind of tempo gives a rhythm to trading, but also has the potential to create sharp short-term swings if macro forces suddenly reverse course.
A close eye should also be kept on treatment and refining charges (TC/RCs) quotes coming out externally, especially those set between major Asian refiners and miners. They serve as a near-term barometer of how tight the concentrate market is. Lower TC/RCs don’t just hurt smelters—they signal that producers hold more leverage, and that usually lends structural support to pricing in the raw market.
As background conditions continue unfolding, it bears watching how import data across Asian gateways changes—if demand patterns in ports like Qingdao start turning more disproportional to seasonality, that will speak volumes. Such movements tend to lead exchange-based pricing by a margin, especially during inter-quarter transitions.
What’s clear now is this: the relationship between supply obstacles, shifting regional consumption trends, and geopolitics remains layered but measurable. Environmental permits, contract disputes, and adjusting cost cues at smelters aren’t headlines—they’re weekly moving targets that indicate the next technical zones traders might need to recalibrate for.
