By Juan Carlos Guajardo
Every October, London becomes the epicenter of the global metals conversation. The LME Week—the traditional gathering of producers, traders, banks, consumers, and investors—is more than a commercial event: it is where the industry takes the pulse of the world. And this year, the diagnosis is clear: we are entering a period of tectonic transformations—slow but profound movements that are redefining how mining and metals fit into the global economy.
For years, analysts spoke of structural changes: the reorganization of supply chains, the intensifying rivalry between China and the United States, the redefinition of the dollar’s role, and the rise of targeted industrial policies. This year, those dynamics have ceased to be hypotheses—they are now fully materializing in the markets.
In this context, the term “tectonic” is not a casual metaphor. These shifts are neither superficial nor reversible. At the core of this movement are the two major powers, China and the United States, both of which have accepted that competition is no longer resolved solely in markets, but in the control of production chains, energy, technology, and critical resources.
In China, the “anti-involution” policy has become a strategic axis. It seeks to avoid sterile internal competition—companies duplicating efforts and eroding margins—by reallocating resources toward sectors where the country can consolidate structural leadership: renewable energy, critical materials, electromobility, and advanced manufacturing. In practice, this reinforces China’s monopsonic power as a dominant buyer of raw materials and a global producer of industrial goods, consolidating its influence over metals demand.
The United States, meanwhile, has responded with a defensive industrial policy: massive subsidies, export controls, and energy incentives aimed at rebuilding its manufacturing base and reducing strategic dependency. Both nations are subsidizing their weaknesses, prioritizing power and stability over efficiency.
For China, this strategy must succeed. It cannot afford a deep slowdown without risking political and social stability. Its economy must continue to grow to preserve cohesion, which makes new stimulus measures likely in the short term.
At LME Week, copper once again took center stage. Although it remains the metal with the most optimistic outlook, discussions were intense among skeptics, reflecting a divide between those who see a structurally tight market and those who perceive signs of demand weakness, particularly due to escalating trade tensions and geopolitical risks.
Optimism is grounded in the fact that more than one million tonnes of forecast mine production over the next three years will not reach the market, due to operational problems at major deposits in Indonesia, the Congo, and Chile. This shortfall has sustained prices above USD 11,000 per tonne and fueled projections of new records by 2026—provided that trade tensions do not deepen.
Yet, concerns persist. The rally in gold and silver, both at historical highs, suggests investors are seeking refuge from the fragility of financial and fiscal systems. Simultaneously, signs of industrial fatigue are emerging in Europe, alongside a mild slowdown in Chinese manufacturing demand.
However, while precious metals serve as safe havens, the rest of the metals complex continues to demonstrate surprising resilience. Despite successive shocks—pandemic, wars, inflation, and high interest rates—the global economy has not collapsed. Metals demand remains solid, driven by the energy transition, infrastructure spending, and Asia’s dynamism. The risk, however, is that this apparent stability may conceal accumulated tensions that could erupt later in the form of a crisis.
Beyond prices, two other signals stood out in London.
First, cathode premiums set by Codelco reached an all-time high, reflecting a physical market where high-quality, traceable material is increasingly scarce and valued. Second, treatment and refining charges (TC/RCs) are under unprecedented pressure. The traditional global benchmark mechanism—a cornerstone of balance between miners and smelters—may be becoming obsolete. The expansion of Chinese smelting capacity, plant closures in the West, and logistical shifts are pushing the market into uncharted territory.
Another recurring theme in London was the growing difficulty of developing and operating mining projects successfully. Companies face an environment of rising environmental standards, higher financial costs, greater community demands, and increasingly uncertain and slow permitting processes. All this unfolds as many mines face lower grades, greater depths, and longer haulage distances—factors that strain competitiveness.
The result is a complex loop: the world demands more copper, lithium, nickel, and other metals for the energy transition, yet does not necessarily remove the barriers to producing them. This strains the supply response capacity and increases the risk of prolonged imbalances.
The high prices of gold, silver, and copper are not mere anomalies—they are visible symptoms of a structural shift. Markets are revaluing metals not only as industrial inputs but also as stores of value, as hedges against political and monetary uncertainty, and as tangible expressions of economic power.
The tectonic plates of the industry are moving: price formation mechanisms, producer- consumer relationships, logistics chains, and investment incentives are all being reshaped. This is a slow but irreversible reconfiguration.
For mining nations such as Chile and Peru, this outlook is both a warning and an opportunity.The mining industry must read these signals with realism. It is not enough to watch prices; understanding the underlying geoeconomic dynamics is essential.
The challenge is to reposition mining in a context where value lies not only in the mineral itself, but in the ability to integrate strategically into new global supply chains, ensure traceability, build partnerships with end consumers, and project institutional stability.
The world of metals has entered a new era. Those who fail to grasp it in time will be caught in the movement.
Source: Plusmining