Resources at Play

Supply disruptions and outagesElevated

• Chile copper

  Escondida supervisors approved BHP's 36-month contract on 14 October with 64% in favour, removing the strike threat at the largest copper mine in the world. At Centinela, where about 709 workers have been out since 7 October, unions reached a preliminary agreement late on 16 October with a ratification vote on 17 October; Antofagasta keeps 2026 guidance of 625,000-655,000 t. An avalanche at Codelco El Teniente on 11 October killed two contract workers.

• Cobre Panama

  The ministerial commission has asked President Mulino to open formal negotiations on a restart framed around an orderly closure with no concession extension; First Quantum says it awaits government guidance and will engage constructively. The mine is not producing, so supply is unchanged.

• China and the United States

  The SMM Yangshan warrant premium rose to US$137/t on 16 October, social copper inventories rose 12,100 t on the week to about 110,000 t and the SHFE to LME ratio continued to recover. Marex says refined metal keeps flooding into the United States ahead of January tariffs, COMEX stocks are a record 711,609 t and Goldman expects US inventories near 1.8 Mt by year end. Dalian iron ore closed at 672.5 yuan/t with only about 8% of mills profitable.

• LME Week

  Fastmarkets' copper concentrate treatment charge index was minus US$272.20/t on 9 October against minus US$69.70/t at the start of the year and a zero 2026 benchmark, so 2027 terms will dominate LME Week from 19 October. Aurubis set a US$347/t European cathode premium for 2027, Chile mined 3.2 Mt in January to August (down 8%) and Mitsubishi Materials will stop concentrate processing at Onahama by March 2027.

Mining Weekly: EscondidaInvesting.com: CentinelaDiscovery Alert: Cobre PanamaSMM: Yangshan premiumSMM: copper morning meetingBusiness Recorder (Reuters): copperMINING.COM (Reuters): iron oreFastmarkets: LME Week

Chokepoints and trade routesHormuz restricted

• Strait of Hormuz

  UKMTO had issued 18 attack reports in the Hormuz region in October by 13 October, and 12 vessels were attacked in the week to 11 October, the most since the war began, including six on 11 October alone. The Singapore-flagged container ship GFS Pride sank on 13 October after fire and damage, with all 21 crew rescued, and the bulk carrier Cape Dao, struck in September, also sank. Tasnim published video of the burning ADNOC-owned VLCC Al Maqam. The IEA puts September Gulf crude exports at 13.9 million b/d, more than 75% of the pre-war level, with 10.9 million b/d through Hormuz, and a VLCC from the US to Japan now costs about US$81 million against US$9.1 million last year.

• Saudi Arabia and the Houthis

  The 10 October strike on Riyadh airport killed at least 13 people and injured more than 300, and a second projectile killed one on 11 October. On 13 October Houthi missiles hit an Aramco administrative building in Dhahran, causing a fire and, Reuters sources said, extensive damage to several floors; operations continued and the Jazan refinery remains shut since an earlier attack. The coalition struck fuel storage at Ras Isa and Hodeidah, a Houthi spokesman called Saudi oil facilities a legitimate target, and airlines including Lufthansa and Qatar Airways suspended flights. No direct US strikes on Yemen were reported.

• Diplomacy

  Iran said on 11 October that the US reply, relayed through Qatar, to its seven-condition plan to reopen the strait was insufficient and that it is no longer in the process of responding. OPEC+ ministers met in Riyadh on 12 October and said shipping and insurance costs have reached more than a third of the value of the oil. The World Petroleum Congress closed on 15 October, and Lloyd's List publishes its next Hormuz brief on 22 October.

Seatrade Maritime: UKMTO reportsDefenceWeb: tanker attacksIEA: Oil Market Report, OctoberBusiness Recorder (Reuters): Iran responseAl Jazeera: Houthi attacksWorld Oil: DhahranRigzone: OPEC+ in RiyadhEnergyNow: WPC day four

SanctionsActive

• Russia: US

  OFAC on 16 October extended the general licence that allows talks on the sale of Lukoil foreign assets to 24 April 2027; the Kazakh stakes are outside the sale. General License 135 of 9 October allows Russian-origin diesel imports until 7 April 2027, and the Greek-flagged Minerva Zen carrying about 280,000 barrels from St Petersburg was due at Wilmington around 11 October, although Vortexa puts Russian diesel exports at only 190,000 b/d in the third quarter. Lawmakers introduced a bill to block the diesel arrangement, and duties of up to 500% on Russian products under the Sanctioning Russia and Iran Act fall due around 18 October.

• Russia: EU and UK

  EU foreign ministers adopted the 22nd package in Luxembourg on 12 October with 1,569 listings, 826 companies and 743 managers in the military-industrial complex, the largest set ever, plus 77 listings over Duma elections in occupied Ukraine. It contains no new trade, shipping, energy or financial measures, so the price cap, LNG and shadow fleet rules are unchanged and no Kazakh or Central Asian entity was named. The UK made no new designations after its 38 on 8 October; Japan added export bans from 16 October and Australia rejected Russian diesel on 11 October.

• Iran

  OFAC announced Iran-related designations on 15 October under Operation Economic Outcast, targeting international financial networks and shadow banking, alongside new and amended general licences; the 8 October action against 17 shadow fleet vessels and 17 companies stands. US forces disabled the Ocean Molica in the Gulf of Oman on 10 October, and CENTCOM says it has disabled four vessels, turned back 135 and destroyed ten IRGC-linked tankers since the blockade resumed on 14 July. Kpler recorded zero Iranian crude exports in September.

National Business: Lukoil licence (Russian)Clyde & Co: General License 135NV: Russian diesel tankerPenningtons: EU 22nd packageSteptoe: weekly sanctions updateOFAC recent actionsEurasia Review: CENTCOM

Economic backdrop

Rates and the US dollar drove metal prices this week more than physical demand did.