LME copper eases as stronger dollar outweighs tight inventories

• Anglo American, Codelco target 2.7 mnt expansion in Chile
  
  
• ICA India seeks GST cut from 18% to 5% on copper scrap
  
  

LME copper prices remained under pressure throughout the week, declining steadily before posting a modest recovery on Friday. The benchmark price was assessed at approximately $13,310/t, down 2.1% w-o-w from around $13,600/t last week. The correction reflected cautious investor sentiment, macroeconomic uncertainty, and profit-taking following May's strong rally.

LME copper inventories continued to decline throughout the week, falling 4.5% w-o-w from 352,310 t to 336,475 t, highlighting tightening physical availability.

Market sentiment remained cautious during the week as expectations that the US Federal Reserve would keep interest rates higher for longer strengthened the US dollar, reducing the attractiveness of dollar-denominated industrial metals. The stronger dollar weighed on copper demand from overseas buyers and dampened speculative buying interest, keeping LME copper prices under pressure.

Additionally, global copper markets remain focused on the US government's upcoming decision on refined copper import tariffs, with the Section 232 investigation report due by 30 June. If new tariffs are approved, analysts expect US buyers to accelerate copper stockpiling, further tightening global supply. Reflecting these expectations, COMEX copper inventories have climbed to a record high of over 650,000 t.

Global updates

Anglo American and Codelco advance Chile copper expansion

Anglo American and Chile's state-owned miner Codelco have signed agreements to jointly develop the adjacent Los Bronces and Andina copper mines in Chile, unlocking one of the world's largest copper growth opportunities. The integrated mining plan is expected to deliver an additional 2.7 million tonnes of copper over 21 years from 2030 without requiring major new capital investment.

Chinese supplier expects US copper demand to withstand tariffs

Chinese copper processor Zhejiang Hailiang Co. expects US copper demand to remain resilient despite potential tariffs on refined copper imports. Its 90,000 t/year copper tube plant in Houston is operating near full capacity, driven by demand from the automotive, plumbing, and HVAC sectors. The company has also expanded manufacturing in Indonesia and Morocco to diversify production and mitigate trade-related risks.

India updates

India's refined copper production increased 8% y-o-y to 223,000 t during January-April 2026, largely driven by the ramp-up of Adani's Kutch Copper smelter. Despite higher domestic output, copper cathode imports surged 37% y-o-y to 68,656 t, reflecting demand growth that continues to outpace local supply. The widening CME-LME copper arbitrage also reshaped global trade flows, supporting higher imports into India to meet domestic requirements.

The International Copper Association (ICA) India has urged the government to reduce the GST on copper scrap and articles from 18% to 5% and formalise the largely unorganised recycling sector. The move aims to improve transparency, increase the availability of quality scrap for recyclers, and reduce dependence on primary copper.

Outlook

Outlook remains positive as improving India's economic growth is expected to support demand from infrastructure, power, renewable energy, and EV sectors. Goldman Sachs' upgrade of India's FY27 GDP growth forecast to 6.5%, supported by easing geopolitical tensions and lower crude oil prices, reinforces a constructive medium-term demand outlook for copper.

The uncertainty surrounding the tariff decision is expected to increase market volatility and could reshape global copper trade flows while supporting regional price premiums in the US.