MARKET COMMENTAR
3M LME copper prices traded in a range of $13,926–14,875 per tonne in September. Copper ended the month at $14,405 per tonne, recording a monthly gain of approximately 0.84%.
Copper started September on a strong note, reaching $14,441.5 per tonne on September 1, its highest level since January 29. However, prices later came under pressure as profit-taking, a stronger US dollar and selling in global bond markets weighed on the market.
Despite this pullback, lower copper inventories outside the US and renewed geopolitical tensions supported prices by increasing concerns over supply.
Copper continued to strengthen and reached a record high of $14,875 per tonne on September 10. Tighter supply conditions, growing investor focus on copper flows into the US and renewed concerns over supply disruptions due to the conflict in the Middle East supported the rally. Expectations of strong demand from China and continued economic activity and copper consumption in the country also contributed to the price increase.
Following the record high, copper prices fell sharply after Reuters reported that the White House had not yet made a decision on tariffs on refined copper. Uncertainty over the potential impact of US tariffs on global trade, particularly on Chinese copper demand, led to a correction from record levels. However, strong physical demand in China and expectations of low inventories limited the downside.
Copper prices recovered toward the end of the month. The Fed's interest rate decision helped reduce uncertainty around interest rates, while strong demand from China provided further support. Buying activity ahead of planned maintenance shutdowns at Chinese smelters also contributed to stronger demand.
China's upcoming holiday periods, September 25–27 and October 1–7, supported pre-holiday buying. On the supply side, BHP's Escondida mine in Chile, the world's largest copper mine, suspended operations following an accident in which a worker lost his life. The disruption added to concerns over global copper supply.
In the final days of September, copper prices were also supported by data showing that China's manufacturing activity returned to growth in September. However, trading volumes remained relatively low ahead of China's week-long holiday, limiting further gains.
Overall, 3M LME copper ended September at $14,405 per tonne, up 0.84% on the month. During September, copper prices were mainly influenced by Chinese demand, changes in global copper inventories, uncertainty over potential US copper tariffs, geopolitical developments and supply disruptions.
