LONDON: Copper hit its highest in more than 15 months on Wednesday after Freeport-McMoran Inc declared force majeure at its Grasberg mining complex in Indonesia and slashed production guidance for 2026.
A deadly landslide at the Grasberg Block Cave underground mine on September 8 had prompted Freeport to suspend operations in the area. Two unaffected mines could restart in the fourth quarter, but Grasberg Block Cave may only undergo a phased restart in the first half of 2026, the company said.
The market had already priced in some supply tightness, but the update from Freeport, which said its Indonesian unit’s 2026 production could be 35 percent lower than previous estimates, sent benchmark three-month copper on the London Metal Exchange up as much as 3.9 percent to USD10,358.50 a metric ton.
That was the highest since May 2024, when copper hit a record high of USD11,104.50 a ton. The metal was trading at USD10,335.50 as of 1600 GMT.
The force majeure “should result in an immediate short-covering rally”, said Dan Smith, managing director of Commodity Market Analytics.
Copper’s rally dragged other base metals higher. Zinc climbed 1.4 percent to USD2,927 a ton, while aluminium rose 0.7 percent, nickel added 0.4 percent and tin gained 0.3 percent. Lead was the laggard, slipping 0.2 percent.
In the United States, the premium paid to buy aluminium on the physical market - on top of the LME price - was at a record high of USD0.74 per lb, or USD1,631 a ton.
The premium has almost doubled since the end of May after US President Donald Trump raised the tariff on imports of the metal to 50 percent from 25 percent.
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.
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