Copper prices retreated on Wednesday after stronger US inflation revived expectations of a Federal Reserve rate increase and a preliminary agreement reduced the risk of a strike at BHP’s Escondida mine in Chile, the world’s largest copper operation. London cash copper had settled at a record $14,822 on Monday, and exchange inventories had fallen for seven consecutive sessions to 229,650 tonnes.
The market’s outlook remains split between tight physical supplies outside the United States and forecasts of larger global surpluses. Macquarie expects a 223,000-tonne surplus this year and annual surpluses above 700,000 tonnes from 2027 as production expands at Collahuasi, Grasberg, Kamoa-Kakula and Centinela, Tia Maria begins operating and Cobre Panama returns to full production from mid-2027. It expects global demand growth to slow to 1. 5% in 2027, with no growth in China as construction-related copper use contracts and air-conditioner manufacturers consider substituting aluminium.
The International Copper Study Group projects refined-copper surpluses of about 104,000 tonnes in 2026 and 368,000 tonnes in 2027. BMI has a smaller 43,000-tonne surplus this year, but cut its 2026 mine-supply growth forecast to 1. 1% from 2. 4% and expects a deficit from 2027 that could widen to 1. 7 million tonnes by 2035. Its copper-price forecast is $12,900 a tonne for 2027, $15,000 for 2029 and $17,000 for 2035.
The immediate swing factor is the unresolved US tariff policy. More than 1 million tonnes of copper has accumulated in US warehouses, which hold roughly 70% of visible global stocks. Under a rejection, it says Comex prices could collapse, pull London prices lower and reverse the trade that moved metal into the United States. A tariff announced six to eight weeks before implementation could instead trigger another rush of shipments into the country, while a six-month delay could gradually narrow the price gap.
That gap has already nearly disappeared in the spot market. October Comex copper traded below London cash, reversing the premium that had encouraged deliveries to US warehouses. Aurubis has offered customers a record $347-a-tonne premium for 2027 supply, 10% above this year’s level.
The Escondida agreement removed one source of near-term supply risk, while US consumer prices and the possibility of a Federal Reserve hike added pressure to prices. Comex copper remains up more than 18% in 2026, and the retreat also pulled down shares of major producers, including Lundin Mining, Freeport-McMoRan, Southern Copper and Teck Resources.