MCX Copper Future above 492, Super Bullish Zone Targets Price 525-552–600++ (Copper Supply Shortage)
Copper price gains on supply shortage, demand Recovery in China
Copper’s gain has been driven mainly by concerns over strains on supply from key producers in South America.
Thousands of copper workers have fallen ill in Chile, which is the world’s largest producer of the metal, accounting for more than a quarter of global supply.
Mines have reduced their labour force and postponed non-essential activities in an attempt to keep workers safe without forgoing too much output.
The risks to production in Chile and other parts of the world have some analysts warning the market could slip into a supply deficit this year.
Locking in a higher price
Established copper producer Aeris Resources Ltd (ASX:AIS) has locked in higher copper pricing by entering unsecured A$ copper hedges with Macquarie Bank Limited for 9,000 tonnes at a forward price of A$9,096.80 per tonne from its Tritton Copper Operations in NSW.
The hedges will mature over the next six months in scheduled monthly deliveries of 1,500 tonnes.
Aeris executive chairman Andre Labuschagne said: “With the current copper price significantly above our budgeted pricing for the first half of FY2021, we have taken the opportunity to hedge 75% of our copper production over the next six months.
“Locking in this higher pricing enables us to accelerate exploration and life extension projects at the Tritton Copper Operations, with the first project being the exploration drive to the Budgerygar deposit, which sits adjacent to the Tritton underground mine.”
Red River Resources Limited (ASX:RVR) achieved record copper production at its Thalanga Operation in Northern Queensland for the quarter ending June 30, 2020.
An increase in copper grade of ore milled to 1.0% and a record copper recovery to copper concentrate of 84.7% resulted in quarterly production of 2,697 tonnes of high-quality copper concentrate, compared to 2,310 tonnes in the previous quarter.