Copper prices fell on Friday as this week’s rally — driven by supply concerns following an accident at the world’s second largest mine — affected demand.

Benchmark three-month copper HG1! on the London Metal Exchange lost 0.6% to $10,202.50 a metric ton by 0947 GMT.

Copper, used in power and construction, is up 3.6% so far this month after hitting $10,485 a ton, its 15-month high, on Thursday, as analysts lowered their global supply forecasts for 2025 and 2026 following a disruption at the Grasberg mine in Indonesia.

Indonesia’s government reached an agreement with Freeport Indonesia to halt operations at the mine to prioritise the search for trapped workers, the country’s mining minister said on Friday, confirming a previous update on the situation from Freeport-McMoRan FCX.

The drop in supply from Grasberg will reduce the global copper surplus Macquarie Group had been forecasting for 2025 and 2026, but will not be enough to switch the market into a deficit, said Alice Fox, commodities strategist at Macquarie.

“This should support higher prices in the short term, versus our prior forecasts, although prices may struggle to stay above $10,000 a ton,” Fox added.
Adding another layer of pressure on copper was the yuan currency, heading for its biggest weekly drop in two months against the dollar.

China is the world’s top metals consumer. The weaker yuan makes dollar-priced metals more expensive for the Chinese buyers ahead of the country’s national holiday, which runs from October 1 to October 8 this year and usually slows overall activity.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 6.6% this week, while the Yangshan copper premium (SMM-CUYP-CN), which reflects demand for copper imported into China, stabilised at $53 a ton, its one-month low.

Aluminium ALI1! eased 0.2% to $2,653.50 a ton, zinc ZNC1! lost 0.8% to $2,901, lead LEAD1! fell 0.4% to $2,007, tin FTIN1! was steady at $34,360, while nickel NICKEL1! eased 0.2% to $15,245.
Source: Reuters