FX.co ★ Copper Gains on Supply Disruption

Copper futures saw an uptick, reaching approximately $4.43 per pound on Tuesday. This increase was driven by supply concerns following the suspension of operations at the El Teniente mine in Chile due to a tunnel collapse. This particular mine is crucial as it provides nearly a month's worth of ore supply to Chinese copper smelters, intensifying the risk of reduced output in an already strained concentrate market. Despite this supply-related support, copper prices continue to hover near their lowest levels in four months because of ongoing worries about excessive inventories in the United States. These stockpiles had swelled due to advance shipments sent prior to expected tariffs, temporarily elevating domestic premiums. Last week, copper experienced a sharp decline of over 20% after President Donald Trump specified that the new tariffs would apply only to semi-finished goods such as wires and pipes, excluding essential imports like ore, cathodes, and concentrates, which constitute the majority of US copper imports.