Copper Rises on Declining Chile Output

Copper futures climbed above $6.25 per pound on Tuesday, moving back toward three-week highs as production in Chile declined due to a combination of water shortages, lower ore grades, unplanned maintenance, the transition from oxide to sulfide mining, and labor disputes. Chile’s monthly economic activity index has recorded consecutive declines this year, largely reflecting weaker mining activity and reduced copper output across several major operations. Chile accounts for roughly 50% of global copper exports, with the metal contributing more than 10% of the country’s GDP. Copper prices advanced despite growing expectations that the US Federal Reserve will raise interest rates this year to combat inflation. Meanwhile, traders continued to monitor escalating tensions in the Middle East, with the resulting demand shock offsetting concerns over potential supply disruptions.

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