LONDON: Copper prices briefly hit a 16-month peak on Wednesday due to worries about potential shortages from a series of mine disruptions, but it later retreated under pressure from a stronger dollar.
Aluminium also touched its highest in 16 months as available inventories declined.
Three-month copper on the London Metal Exchange climbed to USD10,815 per metric ton, the strongest since May 22 last year, before slipping to USD10,687 by 1600 GMT.
LME copper has gained 21 percent so far this year, lifted in recent weeks by problems at major mines in Indonesia, Chile and Congo.
The mine disruptions resulted in major revisions to forecasts by the International Copper Study Group (ICSG), which on Wednesday cut its expected 2025 surplus to 178,000 tons and said it expected a deficit of 150,000 tons in 2026.
In April, it forecast a surplus of 289,000 tons this year and oversupply of 209,000 tons in 2026. “All the supply disruptions are keeping the market tight,” said Nitesh Shah, commodity strategist at WisdomTree.
“It appears that the miners are doing very little in terms of new exploration and even sinking new mines is getting a lot more difficult, so that kind of tightness is here to stay,” he added.
Operations at Indonesia’s Grasberg mine, the world’s second-largest copper mine, have been halted for nearly a month after a mud-flow disaster killed seven workers.
Adding to the concern, Canadian miner Teck Resources on Wednesday cut its copper production forecast at its flagship Quebrada Blanca mine in Chile.
Weighing on the market was a firmer dollar index, making greenback-denominated assets more expensive for buyers using other currencies.
LME aluminium gained 0.5 percent to USD2,754.50 a ton, the highest since May 30, 2024. LME on-warrant inventories - those not earmarked for removal - dropped to 398,775 tons on Wednesday, having shed 15 percent over the past month.
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