Copper hit a record on Comex while London faces the tightest squeeze of the year

The September contract on Comex touched $6.714 a pound this week, a new record, at the same moment spot copper in London became more expensive than the futures contract — a rare sign of immediate physical scarcity.

The September copper contract on Comex touched $6.714 a pound — about $14,800 a tonne — this week, surpassing the exchange's previous record, set on August 5. The move in the United States happened at the same time the physical market in London sent a rarer signal: spot copper on the LME began trading at a premium of more than $200 a tonne over the three-month contract, the sharpest backwardation of the year — up from $34 at the end of July. In practice, buyers in London are paying more to receive metal now than to receive it three months from now, a classic symptom of immediate physical scarcity, not just a speculative bet on the future price.

A record price and backwardation are two different phenomena happening for partly distinct reasons, and separating the two is what turns a superficial read of this kind of news into a useful one. The Comex record has a macro component: a softer US inflation reading reduced expectations of higher interest rates, which historically pushes up dollar-priced commodities. London's backwardation, on the other hand, is a physical-market signal, not a financial one — it reflects that copper available for immediate delivery is scarce there and now, regardless of any bet on the September price. The causes of that scarcity are traceable: Chilean output fell 2.6% in the second quarter, global mine production growth is estimated at just 0.2% this year, and the Gresik smelter in Indonesia, which processes concentrate from the giant Grasberg mine, has been offline since a boiler leak in early August. Add to that speculation over US import tariffs, which has encouraged shipping metal into American warehouses ahead of any decision in Washington — a flow that further drains stocks available to the rest of the world and deepens the regional imbalance between the two markets.

For any company that buys, sells or plans copper production, the difference between a price rally and a physical supply squeeze completely changes the right call to make — hedging, early stockpiling or simply waiting are the right responses to different problems. The squeeze in London, more than the record in New York, is the data point that signals real short-term shortage risk for industrial buyers, right when demand for copper in power infrastructure, construction and advanced technologies remains structurally on the rise. Cochilco, the Chilean agency that tracks the industry, has already raised its 2026 average price forecast from $5.55 to $5.95 a pound — an official acknowledgment that the current squeeze isn't passing noise.