UPDATE: Copper prices have skyrocketed above $13,000 per ton, driven by an ongoing strike at Chile’s Mantoverde Mine and escalating fears of renewed US tariffs. This surge marks a significant moment in the commodities market, as both supply chain tensions and tariff uncertainties tighten the outlook for copper availability.
The strike at Mantoverde, initiated by workers demanding better conditions, could extend for over two months, according to union leaders. This mine, while only contributing 0.5% of the global copper supply, is crucial as it highlights broader labor tensions within the mining industry fueled by soaring prices. The mine’s operator is attempting to maintain 30% of its normal production levels using non-striking employees.
Analyst Barbara Lambrecht from Commerzbank emphasizes that the strike exemplifies growing unrest in the sector, potentially leading to further industrial actions. “High copper prices are exacerbating tensions between mining companies and workers,” she noted, warning that this could be just the beginning of a larger wave of labor disputes.
Adding to the price pressure, concerns are mounting over potential US tariffs on refined copper. The US government is expected to make a critical decision by the end of June 2023 regarding tariff exemptions that were previously in place. Last summer, fears of tariffs had already led to significant premiums being paid on the New York COMEX compared to the London Metal Exchange (LME). Although premiums have recently declined, the climbing copper inventories in the US are raising alarms about potential scarcity in the global market.
In response to these developments, copper futures on the LME have rallied by more than 4%, marking a notable milestone as prices exceed the $13,000 threshold for the first time. This price rally is a clear indicator of the growing supply squeeze, with market experts urging caution.
As the situation unfolds, traders and investors will be closely monitoring both the strike’s impact on production and the US government’s tariff decisions. The outcome of these events could reshape the copper market landscape in the coming weeks, highlighting the critical intersection of labor relations and international trade policies.
Stay tuned for further updates on this developing story as it continues to evolve.
