Copper Surges to All-Time High on Supply Shortages and Strong Demand
Copper prices have reached an all-time high of $14,533 per metric ton on the London Metal Exchange, surpassing its previous record set in January. This surge is driven by a combination of factors, including supply shortages and a weaker dollar.
Bullish investors are betting that stagnant mine supply will provide further fuel for the rally. However, Morgan Stanley has revised its forecast to expect production to remain unchanged or decline slightly, which could lead to tighter availability and higher prices.
The copper market is experiencing a shortage of sulfuric acid, a key input in extraction and refining, particularly in heap leaching operations. Disruptions around the Strait of Hormuz have significantly tightened availability, adding pressure to an already tight supply picture.
Chile, the world's top copper producer, has reported its weakest second-quarter output in at least 19 years, cutting its full-year production forecast for a second consecutive quarter and expecting output to decline 2.6%. Meanwhile, global mine supply is expected to grow 1.6% this year.