Copper supply is affected by many factors

Global copper supply at risk

Strikes at three mines in Chile, the world's largest producer, are expected to tighten an already undersupplied copper market, according to reports.

By far the most serious threat to global supplies comes from Escondida, the world's largest Electrolytic Copper Metal mine, where workers rejected a final wage offer from BHP in a vote last week.Unless the two sides reach an agreement in government-mediated talks this week, the mine's output this year will be significantly affected.In addition to Escondida, two other smaller mines in Chile, Codelco's Andina and JX Nippon Mining&Metals' Caserones, are also in the same stage of collective bargaining.The shutdown of three mines will leave more than 7 per cent of global copper supply in doubt.That is reflected in prices, with copper futures rising in the past two weeks after retreating from record highs in May.

Labor tensions are rising in major copper-producing countries at a time when new energy industrial policies are being introduced around the world and stimulating demand for industrial metals.And that's just one thing. Major copper-producing countries like Chile and Peru are also considering raising taxes to help address their own problems exacerbated by the COVID-19 pandemic.And Chile is said to be drafting new laws and regulations that could impose tougher rules on water, glaciers, minerals and community rights.This will further constrain global copper supply and investment in mine development.

According to statistics, more than 200, 1990-2020 copper new discovery, in 2015 found that copper is less than 10, after the discovery rate significantly decreased, at the same time because of the copper from the reserves and the release of the report for several years between delay, so big probability in the 10 years, the world is obtained by green space exploration of new copper reserves are still disappointing.In the absence of major greenfield discoveries in the future, copper supply will have to rely more on existing mines.In addition, the lower production and higher costs of existing mines due to lower grade will make copper supply more constrained. Therefore, many institutions are optimistic about the long-term trend of copper price. For example, Goldman Sachs believes that copper price is expected to break $20,000 / ton in the future.Goehring& Rozencwajg, another American firm, thinks copper could rise to $30, 000 a tonne.