Copper Near Record Highs as Smelter Shutdown Bites, Aluminum Surges

Copper prices are back near record highs due to supply chain disruptions and physical scarcity. The Comex September contract touched $6.7005 per pound on Tuesday, just four-tenths of a cent shy of its August 5 record high of $6.7045. The London Metal Exchange's three-month copper price was little changed at $14,195.50 per tonne, with the Comex premium sitting at about $435.

The supply squeeze is partly due to the Gresik smelter in Indonesia being shut for assessment and repair after a boiler leak on August 8. The smelter processes ore from the Grasberg mine, which is still recovering from last September's fatal mudslide and won't reach full production until the end of 2027.

In related news, aluminum prices surged to a seven-week high as Norsk Hydro cut output at its Alunorte refinery in Brazil due to natural gas disruptions. The Middle East accounts for about 10% of global aluminum output, and flows have been disrupted since the Iran war began.