Copper Extends Gains for a Second Session

Copper steadied around $6.25 per pound on Monday after experiencing sharp volatility last week, as persistent supply concerns continued to offset demand-side uncertainties. A powerful storm in top producer Chile disrupted operations at several copper mines and ports across central Chile, prompting major miners including Codelco, Antofagasta, and Anglo American to activate safety protocols. Meanwhile, Antofagasta reported that first-half copper production fell 9.5% to 285,000 tonnes due to weaker output at two key mines. BHP also warned that its Chilean copper production is expected to decline next year, while the IEA flagged tightening sulphuric acid supplies as a result of the escalating Middle East conflict. In the latest developments, the US military carried out fresh airstrikes against Iran after three American service members were killed, while Tehran said it intercepted four vessels transiting the Strait of Hormuz.

Copper futures fell below $6.2 per pound on Friday, hitting a one-week low as the escalating conflict between the US and Iran triggered a broad selloff across metals markets. The US launched multiple strikes against Iran this week, while Tehran retaliated by targeting US bases in neighboring countries, driving oil prices higher and keeping inflationary risks in focus. Investors are increasingly concerned that central banks may keep interest rates elevated for longer or even raise them further to contain inflation. Still, copper prices found some support from mounting supply concerns after a powerful storm struck top producer Chile, causing widespread power outages and significant damage. In addition, Antofagasta reported this week that first-half copper production fell 9.5% to 285,000 tonnes due to lower output at two key mines. BHP also warned that its Chilean production is expected to decline next year, while the IEA flagged tightening sulphuric acid supplies.

Copper futures climbed above $6.3 per pound, hitting over three-week highs as production in Chile declined due to a combination of water shortages, lower ore grades, unplanned maintenance, the transition from oxide to sulfide mining, and labor disputes. Chile’s monthly economic activity index has recorded consecutive declines this year, largely reflecting weaker mining activity and reduced copper output across several major operations. Chile accounts for roughly 50% of global copper exports, with the metal contributing more than 10% of the country’s GDP. Copper prices also benefited from softer-than-expected US inflation data that eased concerns for imminent Federal Reserve interest rate hikes. Meanwhile, traders continued to monitor escalating tensions in the Middle East, with the resulting demand shock offsetting concerns over potential supply disruptions.