METALS-Copper rallies to 15-month high on Freeport force majeure

By Tom Daly

Sept 24 (Reuters) - Copper hit its highest in more than 15 months on Wednesday after Freeport-McMoran Inc FCX.N declared force majeure at its Grasberg mining complex in Indonesia and slashed production guidance for 2026.

A deadly landslide at the Grasberg Block Cave underground mine on September 8 had prompted Freeport to suspend operations in the area. Two unaffected mines could restart in the fourth quarter, but Grasberg Block Cave may only undergo a phased restart in the first half of 2026, the company said.

The market had already priced in some supply tightness, but the update from Freeport, which said its Indonesian unit's 2026 production could be 35% lower than previous estimates, sent benchmark three-month copper CMCU3 on the London Metal Exchange up as much as 3.9% to $10,358.50 a metric ton.

That was the highest since May 2024, when copper hit a record high of $11,104.50 a ton.

The metal was trading at $10,335.50 as of 1600 GMT.

The force majeure "should result in an immediate short-covering rally", said Dan Smith, managing director of Commodity Market Analytics.

Copper's rally dragged other base metals higher. Zinc CMZN3 climbed 1.4% to $2,927 a ton, while aluminium CMAL3 rose 0.7%, nickel CMNI3 added 0.4% and tin gained 0.3%. Lead CMPB3 was the laggard, slipping 0.2%.

In the United States, the premium paid to buy aluminium AUPc1 on the physical market - on top of the LME price - was at a record high of $0.74 per lb, or $1,631 a ton.

The premium has almost doubled since the end of May after U.S. President Donald Trump raised the tariff on imports of the metal to 50% from 25%.

CRU senior analyst Alex Christopher said on a webinar this week that the rise in the premium had been slowed by a roughly 150,000 tons inventory build ahead of the increase in tariffs at the start of June.

"We now believe that has been consumed and that's why we're now seeing the full impact of the 50% tariff," Christopher said.