China will be key to copper prices

Subject

'Red' metal misses the commodity rally.

Significance

Copper prices have struggled to rebound from their eleven-year low of 4,318 dollars per tonne in January and remain flat year-to-date. New supply from mine expansions keeps flooding the market, which is further undermined in the short term by the threat of re-exports from China, where demand for the metal is moderating. In the longer term, copper's challenge is its substitution in manufacturing by cheaper alternatives.

Impacts

• A majority of Chile's miners are due for potentially disruptive wage talks over the next twelve months.
• Iran's national development plan targets production of 2 million tonnes of copper a year by 2025, up from 200 kilotonnes currently.
• Congolese miner Gecamines intends to increase its production to 100 kilotonnes per year over the next three years.