Around 8% of mine supply of copper is at risk of disruption now or in the near future due to strikes, blockades and power shortages in production centers in the United States, Chile, Peru and Zambia.
But at $5,700 per tonne, the three-month copper price on the London Metal Exchange is near two-year lows and down by 4.5% since the start of the year.
The price slump amid rising supply concerns illustrates a trend in trading that is also affecting other industrial commodities and indeed markets. Negative expectations for demand are dominating at a time of trade wars and growing fears of recession.
“A lot of our clients are very concerned about global growth and didn’t [support] the big Saudi Arabian disruption in oil [supply] because of that,” Max Layton, head of EMEA commodities research for investment bank Citi, told Fastmarkets.
Few active trading participants are therefore likely to give much consideration to supply-side...