Copper Market Shifts into Deficit as Supply Fears Rise

Copper prices are rising again due to supply concerns in the market. According to the International Copper Study Group (ICSG), the copper market was significantly undersupplied in June, with a deficit of 85,000 tons after seasonal adjustment.

This shortfall is attributed to weak mine output outside China and Congo, production issues in Chile and the Democratic Republic of the Congo (DRC), and rising cancelled London Metal Exchange (LME) warrants. The reduced year-to-date surplus has fallen to just 32,000 tons.

China's copper production also faltered in July, with a Chinese mining company likely to revise its production forecast downwards due to flooding in the DRC. Additionally, reports of cancelled LME warrants have fueled fears of a supply shortage, as orders for withdrawals of LME copper have surged by over 50,000 tons.