Copper hits fresh all-time high before retreating as squeeze eases

Copper futures surged to a fresh all-time high on Tuesday before pulling back sharply on Wednesday as a weeks-long market squeeze showed signs of loosening, capping a rally that has lifted mining earnings across the sector.

Record and Retreat

Comex copper for September delivery touched $6.7775 a pound — roughly $14,940 a tonne — in early trading on Wednesday, August 26, before retreating 1.6% to $6.6070 by late morning in New York. Tuesday's settlement of $6.7140 per pound had itself marked the contract's highest-ever closing price. By Wednesday, the metal was trading around $6.61 per pound, down about 1.4% from the prior session.mining+2

The pullback came as a severe squeeze on the London Metal Exchange continued to ease. LME on-warrant copper inventories surged more than 50% in three days last week, sharply narrowing the cash-to-three-month backwardation from $436 per tonne to about $176 per tonne. Reuters reported that the prospect of U.S. import tariffs has incentivized massive copper shipments to the United States, draining inventories elsewhere and creating the squeeze. Bloomberg noted the metal has surged about 16% this year on the LME as traders ship huge volumes stateside.reuters+2

Miners Ride the Wave

The record copper price environment has been a boon for producers. Sandfire Resources ↘ 2.32%, which reported full-year results on Wednesday, posted record sales revenue of $1.7 billion and underlying EBITDA of $867 million, with profit of $354 million. Group copper equivalent production rose 38% in the fourth quarter to 47,600 tonnes.quartr+1

South32 also reported on Wednesday, disclosing a 55% rise in full-year underlying earnings to $1.03 billion, driven in part by a $276 million EBITDA increase at its Sierra Gorda copper mine in Chile due to higher realized metal prices. The company's underlying EBITDA rose 28% to $2.5 billion for fiscal year 2026.mining+1

Supply Concerns Persist

Analysts say the rally reflects tight supply rather than a broad surge in global demand. Chile, the world's largest copper-producing country, now expects output to decline in 2026 before recovering next year. Mine disruptions cost the market an estimated 338,000 tonnes in the first half of the year, while CNBC reported the rally "appears to reflect tight supply and disruptions more than a broad acceleration in global growth".sprott+2

The International Energy Agency noted that copper prices have surged to record highs in 2026, with smelters facing mounting strategic pressures as spot treatment charges have been negative since 2024. With the S&P/ASX 200 Materials Index riding a five-day winning streak that included three consecutive record highs, the copper rally's reverberations continue to be felt across global equity markets.ibtimes+1