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Copper registered its biggest weekly gain in three months after a global supply crunch intensified due to a spate of production setbacks.
Traders are monitoring the impact of a deadly accident at Freeport-McMoRan’s huge Grasberg mine in Indonesia, which saw the company declare force majeure on contracted supplies, and the shut down of a Hudbay Minerals Inc. mill in Peru this week.
“The copper market has been, and continues to be, jolted by supply-side issues this year,” said Olga Savina, a commodities analyst at BMI, a Fitch Solutions company. “We expect any prolonged supply setbacks to further strengthen the bullish narrative for copper throughout the remainder of this year and possibly into 2026.”
The incidents in South America are the latest in a series of disruptions to ore supply and show how vulnerable the market is to shocks. Still, China is rapidly expanding global copper-smelting capacity and is torpedoing the fees processors can charge.
China’s top copper smelters are now urging authorities to tighten control over new capacity. They’ve warned that cut-throat competition has driven processing fees to historical lows, threatening the industry’s health.
Copper slipped 0.8% to settle at $10,181.50 a ton at 5:50 p.m. in London, taking its weekly gain to 1.9%. All other LME metals except tin were lower.
(By Katharine Gemmell)