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Mining industry

Copper Market Volatility: Strikes and Supply Chain Disruptions Unfold

Strategic Insights

— 1 min read

Mexican mining company Grupo Mexico SA has stated that a strike at its Asarco LLC unit could cut production in half, affecting the global copper supply. Meanwhile, East Asia aluminum premiums have fallen due to increased supply and softened demand. In another development, Zambia's Maponi Copper mine is seeking government protection for its investments after a recent threat by the mines minister to withdraw its mining license.

Key Takeaways:

  • Grupo Mexico SA's Asarco LLC unit may experience a 50% reduction in production due to a strike that began over the weekend.
  • East Asia aluminum premiums have decreased for the third consecutive quarter, reaching $72-$73 a metric ton in South Korea, down from $79-$80/ton in the second quarter.
  • Maponi Copper mine in Zambia is seeking government protection for its investments after a threat to withdraw its mining license.
  • The unionized workforce at Placer Dome Inc.'s Zaldivar copper mine in Chile has gone on strike.
  • Jiangxi Copper Co., one of China's largest copper producers, expects its first-half net profit to rise over 50% from the same period last year under Chinese accounting standards.
  • Copper futures at the Comex division of the New York Mercantile Exchange settled higher on Tuesday after receiving a boost from news of strikes at copper mines in Chile and Arizona.
  • Copper futures on the Shanghai Futures Exchange settled mostly higher on Tuesday due to short covering following overnight rebounds in London Metal Exchange copper.

Statistics:

  • 50% reduction in production at Asarco LLC unit due to strike (Grupo Mexico SA statement)
  • $72-$73 a metric ton: East Asia aluminum premiums in South Korea (third quarter)
  • $79-$80/ton: East Asia aluminum premiums in South Korea (second quarter)
  • 50% expected increase in Jiangxi Copper Co.'s first-half net profit (Chinese accounting standards)
  • 2,799: Copper futures price at the Comex division of the New York Mercantile Exchange (settlement price on Tuesday)
  • 2.56%: Increase in copper futures price at the Shanghai Futures Exchange (Tuesday settlement)

Sources:

  • Dow Jones Commodities News via Comtex
  • Grupo Mexico SA statement
  • Seoul-based trader
  • Trade sources in Zambia
  • Placer Dome Inc. statement
  • Jiangxi Copper Co. statement
  • Dow Jones Newswires
  • COMTEX (http://www.comtexnews.com)

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