Copper Price Surges
September 2017
The month-average copper cash price increased 8.4% in August to US$6,486/t (US$2.94/lb), and followed 4.6% and 2.1% increases in July and June, respectively. The monthly average for August 2017 was the highest level since November 2014.

The cash price closed August at US$6,760/t (US$3.07/lb). The strong price performance is in spite of July and August being typically quieter months for copper demand because of the northern hemisphere summer holiday period. Prices for copper, aluminium, zinc, nickel and lead have all risen since late June due to positive expectations for metals demand and the weakening US dollar.

A copper-specific factor supporting the metal price is expected due to reductions in smelter and refinery output over the next three to four months. BHP is spending A$350m (US$278m) on a maintenance and rebuilding campaign at its Olympic Dam smelter in Australia from August to November 2017. Copper production is expected to drop to 150kt in the 12 months to June 2018, before increasing to around 215kt in the 2019 financial year. Production at Glencore’s PASAR 330ktpa smelter and 215ktpa refinery in the Philippines is reportedly affected by an earthquake that struck the province of Leyte in early July. PASAR is operating below capacity due to damage to power supply infrastructure in the region.

Japanese smelters plan maintenance shutdowns in the December Quarter. Pan Pacific Copper will conduct maintenance at the Saganoseki 450ktpa smelter and 230ktpa refinery over 70-80 days from late September. Mitsubishi Materials has a 21-day maintenance programme planned at the 300ktpa Onahama smelter and refinery from the 21st of October. Jinchuan began a three-month maintenance shutdown of its 200ktpa smelter in China in early July, with the first phase of works completed on the 24th of August.

Total exchange inventories of refined copper declined by 54kt during August to 577kt, which is similar to the end of month total for June 2017. Month-end LME stocks fell by 69kt to 228kt, as stocks held in Asian LME warehouses decreased by 70kt. Shanghai Futures Exchange stocks at the end of the month were 5kt higher at 184kt and COMEX stocks were up by 10kt to 165kt.