LME copper prices remain muted amid tightening concentrate supply

• Tight concentrate supply keeps copper sentiment supported
  
  
• Strong Chinese demand underpins copper market stability
  
  

Benchmark copper prices on the London Metal Exchange (LME) remained largely unchanged in the week ended 22 May, constant at $13,550/t, as tightening supply-side fundamentals offset pressure from cautious downstream buying and macroeconomic headwinds.

Supply-side fundamentals remained supportive, with copper concentrate shortages continuing to intensify. Spot treatment charges (TCs) for copper concentrate remained deeply negative, reflecting tight mine supply, while lower copper ore imports from major producing nations such as Chile and Peru further reinforced supply concerns. At the same time, LME copper inventories edged slightly lower during the week, indicating continued tightness in nearby exchange availability.

However, expectations of a broader refined copper surplus continued to cap sharper upside momentum. Data indicating a sizeable surplus in the global refined copper market, along with cautious downstream procurement amid elevated prices, limited stronger gains. Weak spot premiums and widening domestic arbitrage spreads in China also reflected softer near-term physical demand sentiment.

On the demand side, conventional sectors such as cables and enameled wire remained somewhat subdued due to elevated price levels. However, structural demand drivers from new energy, EV manufacturing, and AI infrastructure continued providing longer-term support to the market. Rising raw material costs prompting price hikes by automakers and continued investments in copper mining capacity further highlighted confidence in coppers strategic demand outlook.

Overall, copper prices remained resilient during the week, supported by tightening mine supply and robust long-term demand fundamentals, although macroeconomic caution and refined surplus expectations kept gains in check.

Global updates

Trafigura linked to major LME copper withdrawals

Commodity trader Trafigura was reportedly linked to substantial copper withdrawals from LME-registered warehouses in New Orleans, as market participants positioned ahead of a potential US decision on copper import tariffs expected by late June. More than 30,000 t of copper was cancelled in New Orleans during the week, taking total cancelled stocks at the location to over 45,000 t. The move further tightened nearby LME availability and reinforced bullish sentiment across global copper markets.

India updates

Indias copper market remained firm w-o-w, supported by elevated international copper prices and tightening concentrate fundamentals, although physical buying remained cautious at higher levels.

Meanwhile, the market remained watchful as leading primary producers opposed the inclusion of scrap-based FRHC copper rods under existing BIS standards, citing concerns over purity consistency and electrical safety. The ongoing dispute between primary and secondary producers, coupled with disruptions in copper rod imports from the UAE amid Middle East tensions, further tightened spot availability and supported domestic sentiment.

Outlook

Coppers outlook remains firm to range-bound, supported by persistent concentrate tightness, declining mine supply visibility, and strong structural demand from energy transition sectors and infrastructure investments.

However, macroeconomic uncertainty, cautious downstream procurement, and expectations of refined market surplus may continue limiting sharper upside momentum in the near term. As a result, copper prices are expected to remain elevated with volatile movement in the short term.