LONDON: Copper prices rose to a record peak on Monday, supported by speculative buying while news of a zero-fee processing deal involving a Chinese smelter highlighted mine disruptions and potential shortages.
Benchmark three-month copper on the London Metal Exchange rose 0.4percent to USD11,930 a metric ton in official open-outcry trading after touching a record high of USD11,996.
LME copper has climbed by 36percent this year, largely on worries about problems at mines causing deficits next year. Those supply concerns were underlined on Friday when sources told Reuters that Chilean miner Antofagasta and a Chinese smelter agreed on a zero processing fee for 2026 copper concentrate, the lowest ever agreed in annual negotiations.
Processing fees decline when supply is constricted. “A lot of it’s about supply-side tightness, but the broader context is that markets generally are pretty buoyant - it shows there’s a lot of liquidity in the system,” said Dan Smith, managing director at Commodity Market Analytics. Global equities firmed on Monday while oil ramped up and gold and silver hit record highs.
Although momentum was still attracting speculative funds to copper, there were signs that demand was faltering at the high prices, Smith added. “It feels like there’s a slowing down in terms of demand.
EV sales are no longer growing strongly and there’s weakness developing within the consumer side of the economy in China.” The most active copper contract on the Shanghai Futures Exchange closed daytime trading up 1.7 percent at 94,320 yuan (USD13,397.92) a ton. Nickel was the best performer on the LME, rising 2percent in official activity to USD15,100 a ton after reports last week that the country will reduce mine output sharply in 2026. SHFE nickel rose for a fourth straight session, touching a more than one-month high of 121,360 yuan.
Other metals were weaker. LME aluminium dipped 0.2percent to USD2,940 a ton after touching USD2,968 for its strongest since May 2022. Zinc edged down 0.1percent to USD3,070, lead was down 0.6 percent at USD1,973 and tin dropped 1.5 percent to USD42,600.
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