China output cut talk fuels copper’s surge to record high

LONDON: Copper prices soared to new records on Monday as the market focused on plans by smelters in top producer China to cut output next year while a softer dollar reinforced positive sentiment, traders said.

Benchmark copper on the London Metal Exchange was flat at $11,189 a metric ton at 1118 GMT from an earlier all-time peak at $11,294.5. Prices of the metal used in the power and construction industries are up 28% so far this year.

China’s top copper smelters will cut production by more than 10% in 2026 to counter overcapacity in the industry that has led to increasingly distorted copper concentrate processing fees, according to a Chinese market information provider.

However, traders are sceptical about whether copper output cuts in China will happen as previous plans to cut production of refined metal have not been followed through.

“Focus remains on tightening copper availability following last week’s industry meetings in Shanghai, where miners, smelters and traders reiterated concerns about mine disruptions and challenging ore supply negotiations,” said Britannia Global Markets in a note.

“The market is likely to remain highly responsive to incremental news on mine output, tariff policy and Chinese stimulus signals, with the current bias still for higher prices over the medium term.”

Part of the reason behind tight supplies is the large volumes of copper shipped to the United States due to levies on imports of the metal remaining under review.

Elsewhere, attention has returned to low zinc inventories in LME-registered warehouses and six large holdings of warrants - title documents conferring ownership - and futures contracts.

Worries about supplies on the LME market have created premiums or backwardations for contracts along the maturity curve. The premium for the cash zinc contract over the three-month forward at around $224 has more than doubled since the end of October.

Supporting industrial metals overall was the lower U.S. currency which, when it falls, makes dollar-priced metals cheaper for holders of other currencies.

Aluminium was up 0.1% at $2,871, zinc gained 0.5% to $3,071, lead rose 0.2% to $1,985, tin fell 1.5% to $38,575 and nickel CMNI3> added 0.1% to $14,845 a ton.