LME copper prices to ease to $9,100/t in 3Q: JPMorgan

JPMorgan

LME copper prices to ease to $9,100/t in 3Q, says JPMorgan. The bank cites a US destocking cycle and softer China demand. As a result, near-term pricing faces headwinds despite tightness earlier this year.

Why LME copper prices to ease to $9,100/t in 3Q

JPMorgan expects LME copper prices to ease to $9,100/t in 3Q. The bank says US buyers will unwind first-half inventory hoarding. Meanwhile, confirmation of 50% US tariffs reduces front-loading incentives. Copper should divert from the US and replenish LME stocks. Therefore, spreads may loosen and pressure prices.

Risks that could shift the price path

JPMorgan outlines a mild recovery after 3Q. It sees $9,350/t in 4Q, $9,400/t in 1Q, and $9,500/t in 2Q. However, several factors could skew outcomes. A copper scrap export ban or US substitution could move demand. A delay or change to US tariffs could alter flows. Geopolitical shocks in the Middle East remain another wildcard.

US dynamics drove the first-half dislocation. Uncertainty on tariffs sent disproportionate refined imports to the US. May US copper imports rose 129% year on year. China also pulled strongly, with apparent demand up about 10% through May. But JPMorgan sees China softening in 3Q. Housing weakness, slower white goods, and fewer solar installs weigh on consumption.

Arbitrage will likely widen in the coming months. JPMorgan expects CME prices to gain against LME. The LME-CME arb could move toward a 50% premium. This shift reflects tighter US premia during destocking and softer LME benchmarks. Market participants should watch inventories and spreads closely.

The Metalnomist Commentary

For producers, 3Q looks tactically weak but not structurally bearish. Destocking and softer China mask longer-term supply risks. Watch LME inventories, Chinese construction signals, and US tariff execution to gauge the next leg.