The squeeze in the London copper market intensified on Friday, with spot contracts commanding their steepest premiums over later-dated futures in five years as the metal available in exchange warehouses shrinks towards critical levels.

The August contract on the LME traded at a premium of as much as $370 a tonne over September futures, the widest one-month spread since the 2021 squeeze that forced the exchange into emergency intervention. The closely watched cash to three-month spread reached $434 a tonne, also a five-year high, with cash copper changing hands at a record near $14,500 a tonne.

The benchmark three-month contract traded above $14,100, up nearly 14% in 2026, after setting its all-time peak above $14,500 in January.

In New York, Comex copper for September delivery was little changed at $6.59 a pound (some $14,500 a tonne), roughly $400 over the LME three-month price and within sight of Wednesday’s record of $6.7140.

LME stockpiles fell for a 42nd straight day on Friday, the longest run of declines since 2014, to 204,975 tonnes, and nearly half of what remains is already earmarked for withdrawal. With warehouse metal a last-resort source of supply for the physical trade, “holders of short futures positions can be forced into a bidding war to compel holders of inventories and expiring long positions to sell,” Bloomberg reports, adding that some analysts and traders now predict fresh all-time highs above $14,500 a tonne.

Congo panic, tariff tremors

The drawdown reflects traders shipping metal to the US ahead of possible tariffs on refined copper and to China, where smelters are cutting output on tight feedstock supplies after the Democratic Republic of Congo banned concentrate exports.

Andy Home, writing for Reuters, said the scale of the market’s reaction to the Congo ban, which touches less than a fifth of the country’s copper output, says more about the metal than the ban itself: “The real news here is not Congo’s long-standing ambition to move down the value chain, but copper’s acute sensitivity to any sign of supply disruption.” If LME stocks keep draining both eastwards and westwards, he warned, “Doctor Copper’s panic attack is unlikely to be the last.”

BMI, which raised its 2026 forecast only last month, now sees the full-year average approaching $13,500 a tonne, versus $12,700 previously, “with strong upside risks.” Washington’s tariff decision remains the most immediate directional catalyst, the research house said in its weekly strategy note: a phased approach of 15% from 2027 and 30% from 2028 would lend further support into the second half, while another walk-back would pressure prices given record CME stocks of more than 700,000 short tons (about 635,000 tonnes). Either way, the outcome “does not materially alter our outlook, leaving copper’s longer-term supportive fundamentals largely intact.”

Chile’s road back to 6 million tonnes

Events in Chile this week showed just how difficult the top producer’s road back to 6 million tonnes a year is turning out to be. Antofagasta trimmed its production guidance about 5% despite a 72% jump in first-half profit, still counting the cost of July storms that forced Los Pelambres to halt operations, and Codelco said the stalled Andes Norte project at El Teniente will only reach production in 2029.

National output has been stuck around 5.5 million tonnes, 5.415 million last year against a 2018 peak of 5.831 million, held back by falling grades, weak exploration and permitting that averages 147 approvals per project and can take more than a decade. Santiago has now set up a public-private group to accelerate permits and help finance junior miners. Economy and mining minister Daniel Mas, who set his sights on 6 million tonnes on taking office in April, wants approval times cut by up to 70%, corporate tax lowered to 23% from 27% and 25-year stability contracts for strategic projects.

In Indonesia, PT Smelting’s Gresik plant, 66% owned by Freeport Indonesia, has been shut since August 8 after furnace damage. The smelter produces around 342,000 tonnes of cathode a year and Freeport expects repairs to be completed this quarter, with the restart of its new Manyar smelter nearby accelerated to the end of August.

Copper equities have cooled this week alongside the metal but remain comfortably higher this month. Through Friday morning in New York, over ten trading sessions, Ivanhoe Mines was up 15% in August, First Quantum 12%, Freeport-McMoRan 6.5% and Teck nearly 6%, against a 2.3% gain for the metal, while Antofagasta has slipped 3% since its guidance cut.