Copper Prices Soar Amidst Supply Disruptions and Mining Equities Lag

Copper prices have surged to their highest levels in weeks as supply disruptions intensify. According to RBC Capital Markets, spot copper jumped by 4.3% over the week to reach US$6.73/lb.

This price increase has left mining equities lagging behind, with a 2.6% decline recorded over the same period. This widening gap between commodity prices and producer valuations suggests that investors are not yet fully convinced of the sustainability of current copper prices.

The supply squeeze is being driven by a series of disruptions across major copper-producing regions. A boiler failure at Indonesia's PT Smelting Gresik facility, which processes Grasberg concentrate, has reduced production levels. Meanwhile, Antofagasta has cut its 2026 production guidance to 625,000-655,000 tonnes following storms that halted Los Pelambres.

RBC notes that Chinese demand remains a counterweight to the deteriorating supply outlook, with unwrought copper imports falling by only 11.5% year-on-year in July. However, the overall picture is one of increasing scarcity, which RBC believes will continue into next year and beyond.