Copper rose the most in almost three months on Wednesday, touching a one-week high, after Freeport-McMoran Inc declared force majeure at its Grasberg mine in Indonesia and said operations won’t resume until the first half of 2026.
A landslide at Grasberg, one of the world’s largest copper-gold mines, on September 8 left two workers dead, with five still missing, and prompted Freeport to suspend operations there.
The market had already priced in some supply tightness, but the update from Freeport sent benchmark three-month copper on the London Metal Exchange up as much as 2% to $10,172 a metric ton, the highest since September 16 and within a whisker of its recent 15-month high of $10,192.50.
The jump was copper’s biggest since June 26. It was last up 1.6% at $10,126 a ton.
The force majeure “should result in an immediate short-covering rally”, said Dan Smith, managing director of Commodity Market Analytics.
Copper had drifted lower before Freeport’s announcement, which also indicated that 2026 production at its Indonesian unit could be 35% lower than previously estimated, amid quiet trade before October’s week-long holiday in top metals consumer China.
The rally dragged most of the base metals complex higher. Aluminium was up 0.1% at $2,624 per ton, while zinc and lead both gained 0.2%. Nickel declined by 0.3%, while tin slipped 0.1%.
In the United States, the premium paid to buy aluminium AUPc1 on the physical market - on top of the LME price - was at a record high of $0.74 per lb, or $1,631 a ton.
The premium has almost doubled since the end of May after U.S. President Donald Trump raised the tariff on imports of the metal to 50% from 25%.
CRU senior analyst Alex Christopher said on a webinar this week that the rise in the premium had been slowed by a roughly 150,000 tons inventory build ahead of the increase in tariffs at the start of June.
“We now believe that has been consumed and that’s why we’re now seeing the full impact of the 50% tariff,” Christopher said.
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