FX.co ★ Copper Firms Up as Supply Disruptions Persist

Copper futures remain strong, maintaining levels above $5 per pound as of Tuesday. This positions copper near its peak in over two months, primarily due to ongoing supply issues in Indonesia and Chile, which continue to raise concerns about shortages. In Indonesia, all workers reported missing after the previous month's incident at the Grasberg mine have been confirmed deceased. Freeport-McMoRan, the mine's operator, has reportedly stated that full production is unlikely to resume before early 2027, leading to a 35% reduction in its 2026 sales forecast. Meanwhile, in Chile, copper production witnessed a nearly 10% decline year-over-year in August, marking the most significant drop since 2023. This decrease followed an earthquake in late July which compelled Codelco to stop operations at its El Teniente site. Additionally, an optimistic demand outlook is supported by growing expectations of another rate cut by the US Federal Reserve this month, with a further reduction anticipated in December.