Copper may hit new high as AI demand collides with deadly storms, strategists say
Deadly storms that have disrupted copper mines in Chile could amplify market strains, strategists say, as the U.S. Although the immediate outages appear...
Key points
- Deadly storms that have disrupted copper mines in Chile could amplify market strains, strategists say, as the U.S.
- Although the immediate outages appear limited, mining disruption in Chile — which accounts for more than a fifth of global copper production — has landed in a market already distorted by U.S.
- Ewa Manthey, commodities strategist at ING, said the storms alone were unlikely to upend the copper market.
- Section 232 tariffs and China's crackdown on the availability of scrap copper have tightened global supplies this year.
What happened
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Deadly storms that have disrupted copper mines in Chile could amplify market strains, strategists say, as the U.S. Although the immediate outages appear limited, mining disruption in Chile — which accounts for more than a fifth of global copper production — has landed in a market already distorted by U.S. Ewa Manthey, commodities strategist at ING, said the storms alone were unlikely to upend the copper market. Section 232 tariffs and China's crackdown on the availability of scrap copper have tightened global supplies this year. "It just amplifies mining supply risks for Chile, in which we expect a second year of declining output," she later said via email. Scott-Gray said that inventories on the London Metal Exchange and Shanghai Futures Exchange are below their five-year averages, signaling "real world physical tightness." Now, with three-month copper on the LME trading at around $13,750, "it is not out of the question that we will see another record high for copper being posted this year, especially with speculative net longs now prevailing across all major exchanges," Scott-Gray added.