Copper prices are headed for a monthly advance on growing signs of tight supply. Large flows of copper material moved to the US ahead of a pending decision by the Trump administration on import tariffs.
Nearly two-thirds of visible global copper inventories, or 64%, are now held in the US. Inventories on the London Metal Exchange and Shanghai Futures Exchange are below their five-year averages. Three-month copper on the London Metal Exchange was trading at around $13,750.
Storms Disrupt Chilean Mining
Deadly storms in Chile disrupted copper mining operations. Heavy snow, flash flooding and high winds swept across South American nations over the past week, killing 13 people. The storms disrupted operations run by Anglo American, Antofagasta, Lundin Mining and state-owned Codelco.
Antofagasta, the London-listed Chilean major, halted mining and processing at its Los Pelambres operation. Toronto-headquartered global miner Barrick evacuated employees because of the extreme weather. Lundin Mining said operations at its Caserones mine in Chile's northern Atacama region could take two to three weeks to restart.
Power lines serving the Caserones mine were damaged by heavy snowfall, forcing Vancouver-based Lundin Mining to suspend operations on July 18. Rainfall disrupted Lundin Mining's Candelaria mine, although the site continued operating using existing ore stockpiles and later returned to full capacity.
Chile accounts for more than a fifth of global copper production. Chile, the world's biggest single copper producer, recently downgraded its output by 2% this year to 5.3 million tonnes.
Market Outlook and Analyst Views
Ewa Manthey, commodities strategist at ING, said the storms alone were unlikely to upend the copper market but the disruption reinforces the broader theme that supply is increasingly struggling to keep pace with demand. Natalie Scott-Gray, senior metals demand strategist at StoneX, said uncertainty over potential US Section 232 tariffs and China's crackdown on the availability of scrap copper have, according to Scott-Gray, impacted global supplies this year.
Natalie Scott-Gray described the impact on major producers from the storms as 'temporary and limited,' highlighting contingency plans designed to contain the damage. She said it is not out of the question that another record high for copper will be posted this year, especially with speculative net longs prevailing across all major exchanges.
Natalie Scott-Gray expects Chinese buying to ease in August, reducing the flow of metal into China and slowing withdrawals from LME inventories. She said the largest unknown in the market remains what the US administration will do over Section 232 tariffs. George Cheveley, natural resources portfolio manager at Ninety One Asset Management, said storms are by their nature short-lived unless they cause major infrastructure damage.
George Cheveley said speculation on US tariff changes remains a main driver of price moves rather than physical demand. Some analysts consulted by the publication flagged the outsized impact on commodity markets from the stronger-than-usual El Niño this year, with both floods and drought potentially affecting copper mining.
Anglo American Earnings Jump
Anglo American reported a 35% jump in its earnings before interest, taxes, depreciation, and amortization to $4 billion in its first half trading statement. Duncan Wanblad, CEO of Anglo American, said the company is 'very, very bullish' on copper's fundamentals.
Duncan Wanblad said Anglo American has 'reshaped its business' around copper. Copper prices hit an all-time high of $6.70 per pound, or $13,643 per metric ton, on June 2.