Copper Edges Lower After World’s Biggest Mine Averts Strike

(Bloomberg) -- Copper slipped after BHP Group’s Escondida mine in Chile, the world’s largest, averted a strike that would have tightened supply as the industry struggles to keep pace with demand from data centers and power grids.

Near-record copper prices have emboldened workers to seek a greater share of mining profits, while producers seek to contain rising costs. Two unions at Antofagasta Plc’s Centinela mine in Chile have been on strike for about a week.

Any stoppage would have added to a bumpy year for copper supply from Chile, where production has been hit by labor actions and weather-related disruptions. In August, the country had its worst month for copper output in more than 15 years. 

Copper earlier approached an all-time high, with Europe’s top producer Aurubis AG stating that huge shipments of metal to the US are fueling tight market conditions. Comments from the smelter came after Benchmark Minerals reported that the company has offered a record premium of $347 a ton to supply its customers for 2027, marking a 10% increase over this year’s levels.

The surcharges — which customers pay on top of futures — are a widely watched gauge of supply and demand in the physical market. Traders have been shipping record volumes of copper to the US in advance of potential tariffs on the metal, tightening conditions elsewhere and helping to lift prices to record highs this year.

“There is some tightness in the market and a lot of material has relocated to the US, leaving warehouses quite empty,” a spokesperson for Aurubis said. He declined to comment on the premium.

Copper reached a record near $14,900 last month, and has since hovered not far from that level against a backdrop of uncertainty about Fed policy and the impact of the US-Iran war. US consumer prices advanced in September at the fastest pace in five months, reinforcing expectations for additional Fed rate increases. 

New York Fed President John Williams has said he still sees one more interest-rate hike as appropriate this year, and that he doesn’t believe another will be necessary in 2027. Higher rates can be a headwind for metals by cooling the economy and raising costs.

Copper was 0.6% lower to settle at $14,490.50 a ton in New York. Zinc, nickel and aluminum also fell.

--With assistance from Martin Ritchie, Archie Hunter and Jacob Lorinc.

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