Copper Prices Surge Nearly 2% as Supply Disruptions Deepen – ING

Copper prices surged nearly 2% on Monday, touching $11,000 per tonne on the London Metal Exchange (LME) as traders in China returned from the holiday break with renewed optimism. The rally was driven by growing concerns over global supply shortages and expectations of upcoming Federal Reserve rate cuts, according to ING analysts Ewa Manthey and Warren Patterson.

Global Supply Woes Fuel the Rally

The copper market gained momentum as reports of production disruptions at major mines intensified fears of tighter supply.

Major producers including Teck Resources (Quebrada Blanca), Freeport-McMoRan (Grasberg), Codelco (El Teniente), and Hudbay Minerals have all faced output setbacks this year.

These disruptions have led analysts to revise global output forecasts downward, boosting market sentiment and driving copper prices higher.

Codelco Output Hits 21-Year Low After El Teniente Collapse

Chile’s state-owned miner Codelco recorded its lowest monthly production since 2003, producing just 93.4 thousand tonnes in August, down 25% year-on-year from 125.3 thousand tonnes.

The sharp decline followed a deadly collapse at the El Teniente mine, which halted production and disrupted recovery efforts. The company reportedly lost around 33 thousand tonnes of copper output due to the incident, forcing a cut to its 2025 production guidance.

Meanwhile, output from the Collahuasi mine — jointly owned by Anglo American and Glencore — also fell 27.5% year-on-year to 35.4 thousand tonnes, mainly due to lower ore grades.

Fed Rate-Cut Expectations Add to Bullish Momentum

Beyond supply constraints, the copper rally gained further strength from expectations of U.S. Federal Reserve rate cuts later this year.

Lower interest rates typically weaken the U.S. dollar, making commodities like copper more attractive to global investors and traders.

This macro backdrop, combined with supply disruptions, is fueling speculation that copper prices could stay elevated in the short term.

Outlook: Copper May Stay Strong Through 2025

With supply challenges persisting and demand from clean energy and infrastructure projects remaining robust, analysts expect copper prices to remain high in the coming months.

Traders are closely monitoring updates from key mining firms and upcoming central bank policy decisions, which could determine the next major price direction.

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