Chile: copper production at seven-month low
Copper production in Chile, the world’s largest copper producer, recorded its worst month for copper in September since February due to work stoppages and falling ore grades at the country’s aging mines.
The country’s production fell 6.9 percent year-on-year in September to 451,128 tonnes and 3.4 percent from August, according to the government statistics agency. INE said on October 29.
The surge in copper prices this year has given Chilean unions more leverage than in the recent past, exacerbating tensions in some collective bargaining, including a one-month strike at Codelco’s Andina mine near the capital Santiago.
Recently released figures put Chile’s lost copper production at the end of September at 4.2 million tonnes, down 1.9% from the country’s total production in 2020.
Used in everything from building materials to batteries and motors, copper is both an economic indicator and a key ingredient in the push towards renewables and electric vehicles. If producers fail to close the deficit, prices will continue to rise and present a challenge for world leaders, who are focus on a global energy transition to fight climate change.
According to CRU Group estimates, the copper industry must spend more than $ 100 billion to close what could be an annual supply gap of 4.7 million tonnes by 2030.
What happened to London Metal Exchange copper stocks earlier this month illustrates just how tight the market can become.
The LME was recently caught off guard by a sudden emptying of the copper available in its warehouses, which lowest inventory levels since 1974. In the past two months, freely available inventory has decreased by more than 90% in warehouses monitored by the LME as orders increased.