Column: Raw materials squeeze jolts copper out of its torpor

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Column: Raw materials squeeze jolts copper out of its torpor
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London Metal Exchange copper surged by 3.1% on Wednesday, breaking out of its long-standing range. The move extended on Thursday morning to an eleven-month high of $8,976.50 per metric ton.is news that China’s copper smelters have agreed to curb output in response to a much tighter-than-expected raw materials market.

Smelter treatment charges say a lot about what’s happening in the upstream segment of copper’s supply chain and right now they’re flashing red warning lights. In January China’s Nonferrous Metals Industry Association advised, opens new tab the country’s copper smelters they needed “to bring maintenance ahead of schedule or extend the maintenance time, to cut production and to postpone the commencement of new projects.”

Tellingly, inactive capacity in top producer China averaged 8.3% this year, up from 4.8% last year, a much sharper jump than in the rest of the world.

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