It is structural, not cyclical. Codelco has confirmed to Reuters that El Teniente will remain capped at around 301,000 t per year for about five years following the July 2025 rockburst, against 356,000 t in 2024. In August Codelco also paused the Andes Norte expansion over new seismic risks, with output there now expected in 2029 (Reuters). Chile as a whole produced 12.7 percent less in August than a year earlier (Cochilco via Reuters, 9 October). According to ICSG data for January to July 2026, the refined market, adjusted for Chinese bonded stocks, showed a small deficit of around 5,000 t, and global mine output fell 1 percent. The stage before matters most: Fastmarkets assessed treatment and refining charges for concentrate at minus 232 USD/t at the end of August, a record low, and the Democratic Republic of Congo banned exports of copper and cobalt concentrates with effect from 6 August. Contracts covering 2027 therefore need a review clause linked not only to the LME level but explicitly to concentrate availability.

With a clause tied to an objective event. The recommendation for staged tariffs on refined copper has been with the President since 30 June. No proclamation is known as of 11 October; Reuters reported on 10 September that the plan had stalled over affordability concerns. The distortion remains measurable: COMEX warehouses hold a record 711,609 t (Reuters, 9 October), while LME stocks are falling. More than three months in limbo is no all-clear but a pent-up price impulse that can be released in a single day. Tie the adjustment clause to publication of a proclamation in the Federal Register, not to a market assessment, and explicitly set out the price basis for volumes already confirmed but not yet delivered.

Whether they actually move in line with the commodity market or rise independently. Especially at high LME levels, a clean separation between metal value and processing cost is worthwhile, because otherwise a commodity price increase gets monetized twice.

Whenever price volatility makes fixed commitments risky for one side. Index-linked clauses tied to LME benchmarks create transparency and reduce renegotiation pressure. The key is choosing the right reference period and adjustment frequency.

With differentiation, because stocks tell a different story depending on where they sit. In London they fell by 18,475 t from 25 September to 9 October to 233,025 t, a six-week low. In Shanghai they fell to the lowest since January 2024 at the end of September and rose by 20,000 t to 58,744 t after the holiday week. COMEX holds a record 711,609 t (Reuters, 9 October), because the open US tariff decision is pulling metal into the United States. The curve is correspondingly clear: on 9 October cash traded 119 USD/t above the 3-month price and closed at 14,689.00 USD/t, close to the year's high of 14,850.00 USD/t from 17 August. High stocks are therefore no sign of relief if they sit in the wrong place. For procurement this means: stagger fixings, settle on monthly averages and include the direction of stocks in London and Shanghai as a checkpoint in contracts.