FX.co ★ Copper Hits 2-Month Highs on Supply Concerns

Copper futures surpassed $4.9 per pound on Friday, marking a two-month high as supply concerns intensified. This surge was driven by a mud-flow incident at Indonesia's Grasberg mine, which brought operations to a standstill. It is anticipated that production will not resume at full capacity until early 2027. As a result, Freeport-McMoRan, the mine's operator, has reduced its sales forecast for 2026 by 35%. Compounding the situation, Chile experienced a nearly 10% decline in copper production year-on-year in August—the steepest since 2023—after an earthquake in late July forced Codelco to halt activities at its El Teniente mine and smelting facility. Despite these disruptions, some analysts maintain that the global market is still experiencing a surplus, attributing this to increased refined production in China and higher output from Congo. On the demand front, there is optimism that anticipated investments in China's power grid infrastructure will bolster medium-term consumption.