Copper futures hit lifetime high over global supply concerns; what we know so far

Copper prices climbed ₹17.7 to hit a fresh peak of ₹963.45 per kilogram in the domestic futures market on Thursday, September 25, tracking strong global cues, following a major supply disruption at Freeport-McMoRan's Grasberg mine.

Freeport-McMoRan Grasberg mine in Indonesia is the world's second-largest copper source.

On the Multi-Commodity Exchange (MCX), copper contracts for October delivery rose ₹17.7 or 1.87% to hit a record high of ₹963.45 per kg.

Similarly, the November contract for red metal futures increased by ₹17.2 or 1.81% to hit an all-time high of ₹967.05 per kg.

In the international markets, Copper futures on the London Metal Exchange rose more than 1% to hit a record high of $10,501.30 per tonne. Comex copper futures were quoting 1.45% higher to $4.88 per pound.

On Wednesday, Freeport-McMoRan declared force majeure, meaning it would be unable to fulfil contracts to customers from its copper mine in Indonesia due to forces beyond its control.

Earlier this month, mining company Freeport said operations at its Grasberg mine were halted after a fatal mudslide.

Grasberg, which is jointly owned by Freeport and the Indonesian government, accounts for around 3% of global copper supply this year (before the disruptions).

Freeport further said it was not possible to forecast future copper production from the mine and that the disaster was "likely to result in the deferral of significant production in the near-term".

It said a return to previous operational levels "could potentially be achieved" in 2027, the company said.

Meanwhile, Canadian mining company Hudbay Minerals announced a shutdown at its Constancia mill in Peru due to ongoing political protests, adding to the disruption in global copper supplies.

The Constancia mine is one of the world's major copper mines.

"Prolonged disruptions risk further tightening supply, lifting copper prices and straining the smelting sector. On the MCX, copper traded firm on extended supply concerns, though firmer dollar may cap upside," Kotak Securities said.