According to Rio Tinto’s head for copper Bold Baatar, the short-term prospects for copper is “quite robust,” with global stocks heading lower and mining disruptions loosing supply from Latin America.
“We’re seeing really excellent fundamentals,” he told media during the launch of the basement part of the Oyu Tolgoi copper mines in Mongolia, when it is completely operating, it will be the 4th copper mine in the world.
He stated that copper inventories are at multi-year lows and that Chinese demand for the metal was “extremely strong”.
As the world economy picks up steam following COVID 19, global copper inventory levels held in warehouses tracked by the London Metal Exchange (LME) reached their lowest level in 17 years last month. However, Shanghai Futures Exchange inventories have been declining in recent weeks due to a seasonal demand uptick and falling prices.
On Tuesday, the benchmark copper price on the LME fell to $8,674 a tonne due to a strong currency, concerns over the ripple effects of a banking crisis in the United States, and the fact that Chinese demand has not increased.
However since mid-July, when it touched its lowest point since late 2020, the contracts has increased by even more over 5% year till date and by around a quarter.
According to the supply gap coming from America and Mining interruptions occurring in nations like Peru, there are truly major copper shortages overall.
Thus even in the narrow view, there is now a robust demand picture, according to Baatar.
Protest that have blocked highways have interfered with supplies going into and concentrate shipments leaving copper mine in Peru & Chile.
But, according to power data analysis, key mines copper in Peru are restarting operations, which could increase supplies from the world’s second-largest producer.-Rio Tinto