Copper prices (3-month futures) have reached 6-month highs of $6,050/ton due to a global supply shortage of the metal. This came after BHP in Chile, which operates the world’s largest Escondido copper mine, was forced to scale back its output by temporarily closing some of its mines down due to enhanced lockdown measures. Copper importers will be hoping that the pandemic begins to slow down in Latin America as Chile represent 28% of global copper production so, further supply-chain disruption will prove troublesome for business reliant on Chilean copper. Importers may have to start looking to other copper exporters such as Japan and Kazakhstan which also produce a significant proportion of the world’s copper.
In copper (and most other commodities) there isn’t just one price which everyone pays for a ton of copper. Bear in mind that commodities are natural resources retrieved from the ground which means that their geographical location plays an important role in their quality. For example, copper from a mine in Chile will have a different chemical make-up than copper from a Japanese mine. Consequently they will have varying properties, uses and demand thus commanding different prices.