Copper reaches 15-month high as China's smelting restrictions add to supply concerns
Copper prices reached a new 15-month-high on Thursday. This was a continuation of recent gains, as fears about supply were heightened by proposed controls on China's smelting capacities after Freeport McMoran Inc. slashed their mine production forecast for Indonesia.
The benchmark three-month price of copper at the London Metal Exchange increased 0.9%, to $10431.50 per metric ton as of 0939 GMT.
The metal used for power and construction reached a record high in May 2024 of $11,104.50 per ton.
The China Nonferrous Metals Industry Association, which represents the industry in China and has over half of the world's capacity for copper smelting, said that it has proposed specific measures to limit copper smelter growth, as low processing fees continue to reduce smelter profit.
The price spike on Wednesday was still causing traders to grapple with the fact that Freeport had declared force majeure in its Grasberg Mine in Indonesia. It now expects production in 2026 to be 35% less than originally estimated.
Ewa Mannthey, an ING analyst, said in an email that the Grasberg announcement added to a market already tight. The world's second-largest copper mine is Grasberg, and this disruption will likely push the global market into a deficit in the next year.
Manthey said that copper prices will likely remain supported in the future by supply disruptions and limited concentrate availability.
Discount for cash copper contracts on the LME against three-month forward
Goldman Sachs lowered on Thursday its global copper supply forecast for the years 2025 and 2026. They estimated a loss of total 525,000 tons due to disruptions in copper mine production.
Other metals include aluminium, which rose 0.6%, to $2666.50 per ton; zinc, up 0.3%, to $2946.50; lead, up 0.5%, to $2,000.00; tin, up 0.6%, to $34,470, and nickel, at $15,485. (Reporting and editing by Ronojoy Mazumdar, Bernadettebaum and Ronojoy Mazumdar; Additional reporting by Dylan Duan, Lewis Jackson and Dylan Duan)
(source: Reuters)
