Copper prices rose as Chile's state-owned producer Codelco significantly increased its annual premiums, while a weaker U.S. dollar enhanced the metal's appeal. Copper futures climbed 0.4% on Tuesday, approaching $10,900 per ton. Codelco proposed a premium of $335 per ton for some buyers in 2026 annual contracts, calculated above the London Metal Exchange (LME) price. For certain Chinese buyers, the premium was set at $350 per ton for 2026 contracts. This move reflects concerns that a surge in shipments to the U.S. may soon lead to supply shortages elsewhere.

CITIC Securities noted that after hitting a record high of $11,200 per ton on October 29 due to global supply concerns, copper prices retreated by 3%. The pullback was attributed to weak immediate demand, as anticipated AI-driven power consumption growth failed to materialize. Global visible copper inventories rose to 780,000 tons, up 47,000 tons month-on-month and 240,000 tons year-on-year, indicating some demand suppression from high prices.

With limited copper supply growth and strong power consumption prospects, the global copper market faces a widening deficit, supporting a long-term price uptrend. Current prices already factor in supply disruptions at Grasberg and Teck, while weak consumption drives short-term declines. According to CME's FedWatch Tool, there is a 71% probability of a 25-basis-point Fed rate cut in December. A rate cut could reignite copper's rally, while unchanged rates may push prices down to 83,000 yuan per ton, presenting a buying opportunity.

Copper-related equities are trading at 15–16x 2025 P/E (based on 80,000 yuan/ton copper) and 12–13x 2026 P/E (85,000 yuan/ton). Investors are advised to accumulate positions when Shanghai copper volatility declines.

Related Hong Kong-listed copper mining stocks: - CMOC (03993) - ZIJIN MINING (02899) - MMG (01208) - JIANGXI COPPER (00358) - CHINFMINING (01258)