FX.co ★ Copper Set for Second Monthly Advance

Copper futures stabilized around $4.85 per pound on Tuesday, marking a potential second consecutive monthly increase as supply concerns continued to uphold prices. This recent surge occurred following Freeport-McMoRan’s declaration of force majeure for contracted shipments from Indonesia's Grasberg mine, due to a deadly mudslide. The Grasberg site is significant, contributing 3% to the global copper supply. Additionally, the company indicated that a full production recovery is improbable before 2027, leading to a reduction in their quarterly copper and gold sales forecasts by 4% and 6%, respectively. In the meantime, investors are paying close attention to China's efforts to mitigate excessive competition and overproduction, which is likely to decelerate the output of non-ferrous metals. Chinese officials have estimated a 1.5% annual growth rate for the output of the country's top 10 non-ferrous metals, including copper, for 2025 and 2026. This is a significant decrease from the previous 5% target. Despite these developments, copper prices are still approximately 20% below the peak reached in late July, when concerns about U.S. tariffs on copper imports were at their highest.