[MEDIA] Two Chilean copper mines have been hit by strike action...

Two Chilean copper mines have been hit by strike action over the last week (see Post #55296797) and a Canadian one has just been suspended due to wildfires.

The temporary suspension of the Highland Valley mine in Canada due to a nearby wildfire is a reminder of just how accident-prone copper’s supply chain can be at the best of times. The mine produced 120,000 tonnes of copper last year.

These production hits are cumulatively going to slow the recovery in output at the world’s mines, many of which had to lower operating rates due to local lockdowns last year.

Nor has the copper market experienced a huge build-up in stocks during COVID-19 thanks to China’s record imports in the first half of this year.

Which leaves the supply chain more vulnerable to unexpected disruption than it might seem. Mark Thompson says the world is one major supply disruption away from an exponential move higher.



The U.S. Infrastructure Bill’s US$1 trillion focus on upgrading transport systems and homes could boost the country’s copper demand by 3% or 80,000 tonnes per year over a five-year period, according to research house CRU.



But the bill has not yet passed and until it does there probably will not be any tangible traction on physical copper market dynamics.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.