Copper Edges Record as Gresik Smelter Halts Production
Copper prices approached record highs on Tuesday as an outage at the Gresik smelter in Indonesia compounded supply constraints that have kept London benchmark prices above $14,000 a tonne for several sessions. The Comex September contract touched $6.7005 a pound ($14,772 a tonne), just four-tenths of a cent shy of its record set on August 5.
The outage at Gresik, which processes ore from the Grasberg mine, is expected to last several weeks as the plant undergoes assessment and repair after a boiler leak. The Grasberg mine itself is still recovering from a fatal mudslide in September last year and is not forecast to reach full production until 2027.
In related news, aluminum prices surged to a seven-week high after Norsk Hydro announced that its Alunorte refinery in Brazil had cut output by half due to natural gas disruptions. The LME inventory of aluminum fell to its lowest level since November 1990 as Middle East flows have been disrupted since the Iran war began.