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Copper Falls as LME Stocks Rise; Nickel Jumps 4.1%
Copper prices moved lower on October 21 as London Metal Exchange inventories increased and near-term supply concerns eased. The decline came despite record physical premiums in Europe, while nickel surged more than 4% on expectations that Chinese producers could curb output in Indonesia.
Key Points
- LME Copper: ↓0.4% to $14,364/MT.
- LME Inventories: Increased 11,475 tonnes and are up 8% in one week.
- Available Stocks: Metal not earmarked for removal rose 40% over the same period.
- European Premium: Codelco is offering 2027 copper at a record $350/MT premium over LME prices.
- Nickel: ↑4.1% to $16,310/MT on expectations of possible Indonesian production cuts.
SEATTLE (Scrap Monster): Copper prices declined Wednesday as rising exchange inventories eased immediate supply concerns, even as the physical market continued to show sharp regional differences in metal availability.
Three-month copper on the London Metal Exchange fell 0.4% to $14,364 per metric ton by 16:15 GMT, pulling back from the three-week high of $14,700 reached on October 14.
The move came as LME copper inventories increased by 11,475 tonnes. Total stocks have risen 8% over the past week, while available inventories not already earmarked for removal have climbed 40%.
Higher Inventories Ease Immediate Copper Tightness
The sharp increase in warehouse stocks has reduced some of the short-term supply pressure that helped drive copper close to record levels earlier this month.
Macquarie analyst Alice Fox said during an LME Week briefing that current prices appear elevated relative to global inventory levels and that the market could remain in surplus over the next several years.
The most-traded November copper contract on the Shanghai Futures Exchange moved in the opposite direction, closing 0.2% higher at CNY 109,390 per tonne.
ScrapMonster Edge: High Global Stocks, Tight Regional Supply
The copper market is sending two seemingly conflicting signals.
Global exchange-visible inventories are elevated, but much of that metal is concentrated in the United States. COMEX warehouses now hold roughly 70% of global visible exchange inventories.
That concentration has reduced readily available supply elsewhere, particularly in Europe, where physical premiums for 2027 deliveries have climbed to record levels.
The result is not a simple global shortage. It is an increasingly fragmented copper market in which metal is abundant in one region while buyers in another are paying significantly more to secure physical supply.
Codelco Offers Record $350/MT European Premium
Chile's state-owned copper producer Codelco is offering European customers a record $350 per tonne premium over the LME price for 2027 deliveries.
The premium is paid on top of the benchmark exchange price and reflects the cost buyers are willing to pay to secure physical metal under annual supply contracts.
The record offer highlights the difference between headline global inventory levels and actual regional availability.
Copper has been flowing heavily toward the United States since Washington launched its Section 232 investigation into copper imports in February 2025.
The resulting trade has shifted a large share of exchange-deliverable copper into U.S. warehouses, tightening supply available to buyers elsewhere.
U.S. Stockpiling Continues to Distort Global Copper Flows
ScrapMonster previously reported that total U.S. copper inventories, including exchange and commercial stocks, have climbed above 1.6 million tonnes.
COMEX-approved warehouses alone hold more than 700,000 tonnes.
The stock build was largely driven by traders moving metal into the United States in anticipation of potential tariffs on refined copper and to take advantage of pricing differences between COMEX and international markets.
That flow has created an unusual market structure: visible global stocks can appear comfortable while buyers outside the United States face tighter physical availability and higher premiums.
Nickel Jumps 4.1% on Possible Indonesian Production Cuts
Nickel was the strongest performer among the major LME base metals during Wednesday's session.
Three-month nickel surged 4.1% to $16,310 per tonne, reaching its highest level in more than three weeks.
The rally was driven by expectations that Chinese producers operating in Indonesia could coordinate production reductions.
Neil Welsh, head of metals at Britannia Global Markets, identified the prospect of those production cuts as the key catalyst behind the move.
Indonesia Considers Limits on New Nickel Processing Capacity
Indonesia, the world's dominant nickel producer, has also discussed imposing a moratorium on new processing facilities producing partially processed nickel products.
The discussion comes as producers face weak nickel prices and pressure on operating margins following years of rapid expansion in Indonesian supply.
Any meaningful reduction in production growth could change expectations for a nickel market that has struggled with persistent oversupply.
However, proposed production cuts remain under discussion and should not yet be treated as confirmed reductions.
Other Base Metals Mostly Higher
Other LME base metals were mostly firmer during the session.
| Metal | October 21 Move | Price |
|---|---|---|
| Nickel | ↑4.1% | $16,310/MT |
| Aluminum | ↑1.2% | $3,039/MT |
| Zinc | ↑0.5% | $3,742/MT |
| Lead | ↑0.7% | $1,908/MT |
| Tin | ↓0.5% | $51,090/MT |
What to Watch Next
LME copper inventories: Continued stock increases would reduce the immediate scarcity signal that helped support copper's recent rally.
European premiums: Codelco's record $350/MT offer will test how much European buyers are willing to pay for secure physical supply.
U.S. copper flows: COMEX continues to hold an unusually large share of global visible inventory. Any change in tariff expectations could alter the incentive to keep moving metal into the United States.
Nickel production: The next major question is whether proposed Indonesian production cuts move from discussion to actual curtailments.
ScrapMonster Market Read
Copper's latest decline does not eliminate the longer-term supply concerns surrounding the metal, but it shows that rising inventories can still weigh on prices when immediate scarcity eases.
The unusual concentration of copper in U.S. warehouses complicates the picture. Global inventories are high, yet European buyers are being asked to pay record premiums for physical supply.
Nickel is experiencing the opposite dynamic. Years of excess supply have pressured prices, so even discussion of meaningful Indonesian production cuts was enough to trigger a sharp rally.
For scrap markets, both developments matter: copper's regional supply imbalance remains supportive of recycled metal demand, while a sustained nickel recovery could eventually provide firmer support for stainless-steel scrap benchmarks.
Courtesy: Mining.com
