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Shanghai copper reaches a 16-month high due to supply concerns

Shanghai copper prices jumped by more than 16 months on Thursday, as China resumed trading after National Day. Concerns over supply from large mines supported the price in an already tightening market.

The Shanghai Futures Exchange's most traded copper contract closed the daytime trade 4.22% higher, at 86 730 yuan per metric ton ($12,165.97).

The contract reached its highest level since May 22, 2020 at 86.950 yuan.

As of 0704 GMT on Wednesday, benchmark three-month copper at the London Metal Exchange had risen 1.92% to $10,873.5 per ton. This was a significant increase from its previous gain. It has now reached a new 16-month high.

The International Copper Study Group reduced its estimate of 2025 market surplus to 178,000 tonnes from 289,000 due to disruptions in major mines, including Freeport’s massive Grasberg mining complex in Indonesia which has been closed for a full month.

The group expects to have a deficit of 150,000 tons in 2026 compared to its previous estimate, which was a surplus of 209,000 tons.

Teck Resources reduced its production forecast at its flagship Chilean copper mining project Quebrada Blanca until 2028 on Wednesday.

The dollar's downward trend also helped copper prices. The weaker dollar means that commodities priced in dollars are cheaper for traders who use other currencies.

The most active contact closed daytime trading at 287.770 yuan per ton, up 3.49%. This was due to a more aggressive crackdown in Indonesia, the top exporter of tin.

On Monday, Indonesia transferred assets, including smelters, equipment and PT Timah, a state-owned tin mining company, to the miner. President Prabowo subianto urged all authorities, including the military, Custom Office and Coast Guard, to continue efforts to stop illegal mining.

Nickel surged by 2.52%, while lead gained 1.21%.

$1 = 7.1289 Chinese yuan $1 = 7.1289 Chinese Yuan (Reporting and editing by Dylan Duan, Lewis Jackson)

(source: Reuters)