Copper Price Hits $6.44 as Rio Tinto and BHP Rally
Copper price traded at an all-time high of $6.44 a pound today as supply tightened from mine outages, stockpiling and the Iran war. The move puts miners and large industrial users on the spot: the metal is more expensive even as global inventories are reported at a record level.
Rio Tinto And BHP At Records
BHP rose 25% on the Australian stock exchange over the last six weeks and hit an all-time high earlier today of A$60.23, while its stock is up 56% over the last 12 months. Rio Tinto also reached an all-time high earlier today of A$185.50, a sign that traders are pricing in a tighter copper market rather than waiting for supply to normalize.
Dominic Barton, chairman of Rio Tinto, said at the company’s annual meeting in Perth last week that “rising geopolitical tensions was adding to demand for minerals and metals.” That demand is coming from construction, electronics and transport, where a rush to stockpile has joined the push from rapid electrification.
Grasberg Delay And Lost Output
Indonesia’s Grasberg mine sits at the center of the squeeze. A catastrophic mudslide killed seven workers and blocked the mine in September last year, cutting production to about 45% of capacity. Before the outage, Grasberg was producing 1.7 billion pounds of copper a year; since the mudslide, output has fallen to around 700,000 pounds.
A report last week said the mine might miss its previously announced full-scale restart date by 12 months, shifting the target from early next year to early 2028. Freeport McMoRan later disputed that account and said it was sticking with the early 2027 re-start deadline, leaving the market with two different timelines for when one of the world’s largest copper sources may return.
Panama, Congo, And Stockpiles
Lost production at Grasberg followed the closure of the Cobre Panama mine in Panama and an outage at the Kamoa Kakula mine in the Democratic Republic of Congo. At the same time, the blockade of the Strait of Hormuz is limiting oil and sulfuric acid supplies, and sulfuric acid is essential in some copper refining processes.
Last month, Morgan Stanley reported on the market-distorting effects of stockpiles, saying U.S. copper inventories amassed as part of Project Vault were being viewed as a strategic reserve by the market. The U.S. is storing copper for a rainy day, and major users and some governments are doing the same in case supplies dry up, even as overall global inventories are reported to be at an all-time high.
That combination leaves copper with a rare mismatch: record inventories on one side, record prices on the other. If the outages at Grasberg and elsewhere linger, the market is likely to keep pricing metal as if available supply is thinner than the stockpile figures suggest.
