Flooding at a mine in the Democratic Republic of the Congo, the world’s second largest copper producer, could restrict the metal’s supply.
Copper prices rose yesterday to US$4.46 per pound, an increase of 1.66% compared to the previous day, supported by strong macroeconomic results from China and projections of constrained copper supply from the Democratic Republic of the Congo.
Copper futures on the London Metal Exchange also increased yesterday, with three-month prices reaching US$4.42 per pound and December-end prices at US$4.37 per pound. Both figures exceed the average forecast from the Chilean Copper Commission (Cochilco) of US$4.30 per pound for 2025 and 2026.
Futures on the Shanghai Futures Exchange are showing even higher prices, approaching US$5 per pound. Contracts for copper cathode delivery in June stand at US$4.94 per pound, while those for November are at US$4.89 per pound.
Higher demand
Juan Carlos Guajardo, Executive Director of Plusmining, explains that yesterday’s price increase is primarily due to the May Caixin Services PMI rising to 51.1 from 50.7 in April, suggesting expansion in the sector and improved economic activity. “This fuels expectations of higher copper demand from the world’s largest consumer,” he states.
At the same time, he notes that the European Commission announced a new list of 13 strategic projects outside the European Union to secure critical mineral supplies, including copper. This announcement “may be reinforcing perceptions of future structural scarcity and pushing futures prices upward,” he adds.
Tighter supply
In addition to projected higher demand, prices have also been driven by supply issues. Ivanhoe Mines announced yesterday that it will partially resume operations at the Kakula mine in Congo — the world’s second-largest copper producer — after disruptions caused by an earthquake followed by flooding.
“This situation, along with recent announcements of problems at operations in Chile and other countries, is reinforcing the outlook for lower-than-expected copper supply this year,” Guajardo comments.
Álvaro Merino, Executive Director of Núcleo Minero, notes that the copper market is currently relatively balanced. However, “in light of announcements of supply restrictions — such as those from Congo, the world’s second-largest copper producer — this reduced metal availability drives copper prices higher.”
Source: El Mercurio