NEW DELHI, Sep 10: Copper prices have surged to record levels as a growing gap between global mining output and smelting capacity puts pressure on the industry and raises concerns over the availability of copper supplies.
According to a report, copper prices on the London Metal Exchange touched a record $14,737 per tonne in September, marking a rise of nearly 50 per cent over the past year.
The price rally has been supported by tighter mine supplies, changes in global inventories and expectations of possible US trade restrictions. At the same time, the limited availability of copper concentrates is creating significant challenges for smelters.
Treatment and refining charges, or TC/RCs, which smelters generally receive for processing copper concentrates, have fallen sharply. According to the report, these charges have declined from around $300-$400 per tonne to nearly minus $1,300 per tonne, highlighting the growing pressure on smelters.
The situation has emerged as global mining output remains constrained while smelting capacity, particularly in China, continues to expand. This has increased competition among smelters for a limited supply of copper concentrates.
The supply situation is also being reflected in global inventories. Large quantities of copper have moved towards the US market to benefit from the price difference between Comex and LME markets. As a result, Comex inventories have risen significantly, while LME warehouse stocks have fallen to much lower levels.
The development is important for industries that rely heavily on copper, including power, construction, automobiles, electronics, electrical equipment and renewable energy. Sustained high copper prices could increase raw-material costs for manufacturers and put pressure on business margins.
At the same time, higher copper prices could benefit mining companies and encourage greater investment in exploration, new mining projects and expansion of existing operations.
The current market conditions highlight the growing challenge of ensuring adequate copper supplies as demand rises from electrification, infrastructure development and the clean-energy transition. For businesses, securing reliable supplies of the metal could become increasingly important as the global copper market remains tight.
