Copper prices have risen as falling inventories and limited raw material supply strengthen the market outlook.
Three-month copper on the London Metal Exchange reached $13,876 per metric tonne on 3 August after touching $13,900, its highest level since 22 July. The metal ended July at $13,791 per tonne.
Copper stocks in London Metal Exchange warehouses have fallen by almost 40% since the end of May. Inventories now stand at 244,025 tonnes, their lowest level since February.
Lower stocks support pricing because the market has less available metal to absorb production problems or stronger demand. This gives reliable producers a firmer position and increases the value of secure supply.
China is also supporting the tighter outlook. Copper smelters are finding it harder to secure enough concentrate and scrap, while domestic mine supply has not expanded fast enough to meet processing demand.
This has increased competition for raw materials. Treatment and refining charges have weakened as smelters compete for limited concentrate, highlighting the value of companies that control dependable mine production.
That creates a more favourable position for copper producers with stable output, disciplined costs and access to quality resources. Companies able to maintain production may benefit from stronger pricing power as available supply remains restricted.
Demand remains an important part of the outlook. Copper is widely used in construction, manufacturing, electrical equipment and power networks. Continued investment in infrastructure and electricity systems would place further pressure on already limited supply.
KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
