Copper prices climbed closer to record highs this week as tightening global supplies, falling inventories, and mine disruptions in Chile reinforced expectations of a widening supply deficit.
COMEX copper futures edged towards US$6.50 ($9.25) a pound, leaving prices about US$0.20 below June’s record high. On the London Metal Exchange (LME), copper rose nearly 1% to US$13,750 a tonne, extending its gain to 3% for the month and 10% this year.
Supply concerns have intensified as Chinese smelters compete for copper scrap and concentrates, pushing import premiums to their highest level since 2022.
At the same time, inventories continue to tighten. Copper stockpiles in LME warehouses fell by more than 10,000 tonnes this week and are down about 40% since mid-April, reflecting stronger demand and strategic stockpiling.
Fresh supply risks have also emerged in Chile, where severe winter storms have disrupted operations at several major mines. Antofagasta (LSE:ANTO) suspended operations at Los Pelambres, while Lundin Mining (TSX:LUN) halted its Caserones complex. State-owned Codelco also suspended some operations as it continues to grapple with production challenges.
Analysts said prolonged disruptions in Chile could provide further support for copper prices as the market struggles to keep pace with demand from electrification, renewable energy and artificial intelligence infrastructure.
“Any prolonged weather-related outages in Chile could provide additional support for prices,” ING commodities strategist Ewa Manthey told CNBC.
StoneX senior metals demand strategist Natalie Scott-Gray said the disruptions reinforce expectations for another year of declining Chilean mine output.
“It just amplifies mining supply risks for Chile, in which we expect a second year of declining output,” she told CNBC.
Another potential catalyst is the prospect of US tariffs on copper, which analysts say could trigger another wave of strategic stockpiling and arbitrage trading. About two-thirds of visible global copper inventories are currently held in the United States.
Write to Jackson Chen at Mining.com.au
Image: Codelco
