Copper rises as Chile stoppage stirs fresh concerns about supply
Copper rose for a second day as Chilean mining giant Codelco grappled with the aftermath of a deadly accident at one of the world’s biggest underground mines.
Six people were killed in a tunnel collapse triggered by an earth tremor at El Teniente, which accounts for over a quarter of Codelco’s output. Underground operations are halted and — with the company launching an investigation into the causes — it’s unclear how long the stoppage will last or whether it will trigger changes to Codelco’s output goals.
El Teniente produced 356 000 tons of copper last year, making it Codelco’s single biggest mine. That volume is equivalent to more than a month of Chinese imports of refined copper.
Copper rose 0.4% on the London Metal Exchange to reach $9 672 a ton by 11:12 a.m Shanghai time. The market was buffeted last week by the shock US move to exclude refined metal from newly-imposed import tariffs, with the LME price posting its lowest close since early June on Thursday.
The mine’s stoppage comes as the world’s copper smelters face intense competition to secure mine supply. Treatment fees — typically the main earner for smelters — remain at deeply negative levels on a spot basis, and plants in the Philippines and Japan have cut output or closed. Even in China, where output has remained robust, there is some speculation that production is reaching a limit.
Investors are also monitoring other unexpected mine disruptions, including at the massive Kamoa-Kakula complex run by Ivanhoe Mines in the Democratic Republic of Congo. Still, Ivanhoe executives on Friday delivered an upbeat assessment on prospects for returning that mine to previous output guidance.
Other metals opened Monday flat to higher, gaining support from a weaker dollar. Iron ore futures in Singapore rose 0.9% to $100.95 a ton, paring their biggest weekly decline since April. Aluminum and zinc also rose.
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