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News Article

Copper Gets Head Start as China’s Industry Recovers

By Alejandro Ehrenberg | Wed, 04/15/2020 - 15:20

The COVID-19 outbreak has rattled the copper market. Price per ton opened 2020 at US$6,165. By March 23, it had fallen approximately 25 percent. Copper has recovered since then. Its price hovers at around US$5,119 per ton at the time of writing.

Further turbulence is expected while the pandemic runs riot in the world’s economy, but analysts hope for a sustained increase in copper prices once stimulus measures in China and other major consumers start to kick in. Elaborating on this point, UBS executive director Andreas Bokkenheuser said that “one quarter of price weakness would be followed by six quarters of price strength.” Bokkenheuser went on to say that “assuming the world ex China follows China’s current industrial recovery in 2H20, we estimate copper prices will climb up to US$2.35 per pound in 2H20 and US$3 a pound in 2021.”

In fact, as reported by, copper rose this week after a rebound in Chinese imports of the metal suggested that the Asian giant’s industry may already be recovering from the COVID-19 fall. The online mining news outlet noted that “China’s refined copper imports in March rose 13 percent from a year ago to just under 442,000 tons, as factories restarted following COVID-19 restrictions.” 

In addition to demand picking up, one has to take into account the temporary closure of copper mines in key producing countries, which will constrict supply. A shorter supply is a trend dating back to 2019. The International Copper Study Group, an intergovernmental organization of copper producing and using countries, released preliminary data for world demand and supply of the red metal in 2019. The report indicates that world mine production declined by about 0.7 percent. Even if several countries, including Mexico, increased production, reductions in Chile, Indonesia DRC and Zambia more than offset growth. World refined production also decreased by 0.6 percent. Apparent refined usage declined by about 0.8 percent, partly due to a decline in Japan and the EU.

Supply contraction is expected to intensify in 2020. As reported by the Financial Times, “supply cuts affecting about a fifth of the global mining industry have offset a collapse in demand due to the coronavirus outbreak, bolstering prices that have been hit hard in the past month. About 15 percent of the world’s copper mines are now offline or operating at reduced capacity.” The world’s third-largest producer of the red metal, Grupo México, is still operating but has said that it will start to orderly ramp down operations to be able to resume working immediately once the health emergency is over. The Mexican company owns the Cananea mine, which has been ranked as the eighth-biggest copper mine worldwide by

The data used in this article was sourced from:  
Stockhead,, Financial Times, ICSG
Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst