LONDON: Copper prices fell on Friday as this week’s rally, driven by supply concerns following an accident at the world’s second-largest mine, impacted demand.
Benchmark three-month copper on the London Metal Exchange was down 0.7 percent at USD10,189.50 a metric ton as of 1600 GMT. The metal is still up 2 percent this week and heading for its best week since June after hitting a 15-month high of USD10,485 a ton on Thursday, as analysts lowered supply forecasts for 2025 and 2026 following disruption at the Grasberg mine in Indonesia. Indonesia’s government reached an agreement with Freeport Indonesia to halt operations at the mine to prioritise the search for trapped workers, the country’s mining minister said on Friday, confirming a previous update from Freeport-McMoRan.
The drop in supply from Grasberg will reduce the global copper surplus Macquarie Group had been forecasting for 2025 and 2026 but will not be enough to switch the market into a deficit, said Alice Fox, commodities strategist at Macquarie. “This should support higher prices in the short term, versus our prior forecasts, although prices may struggle to stay above USD10,000 a ton,” Fox added.
Adding another layer of pressure on copper was the yuan, which was heading for its biggest weekly drop against the dollar in two months. A weaker yuan makes dollar-priced metals more expensive for buyers in China, the world’s top metals consumer, which is marking a national holiday from October 1-8, when activity usually slows.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 6.6 percent this week while the Yangshan copper premium, which reflects demand for copper imported into China, stabilised at a one-month low of USD53 a ton. Among other metals, aluminium eased 0.2 percent to USD2,652 a ton, zinc fell 1.3percent to USD2,886.50, lead lost 0.7 percent to USD2,001.50 and nickel was down 0.8 percent at USD15,155, while tin rose 0.3percent to USD34,500.
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