Copper dropped sharply again in overnight trade on Thursday coming close to levels last seen during the global financial crisis amid mounting uncertainty about the extent the global pandemic could hit demand and supply of the bellwether metal.
Copper trading in New York fell by more than 8% to $1.9725 a pound ($4,350 a tonne), the weakest level since early January 2016 when it traded below $2.00 for only a week. The last time it traded for a sustained period below this level was in 2008/2009.
In New York trade the metal fought back, rallying by 11.6% with May delivery contracts exchanging hands for $2.1990 in mid-afternoon trade. Year to date copper is still in bear territory with a 21% decline.
Producers across South America, where the bulk of the world’s copper is produced, have halted or cut back operations and slowed construction projects.
Hong Kong-listed MMG said on Thursday that operations at its Las Bambas mine with expected production in the 360kt range for this year had been reduced temporarily after Peru declared a state of emergency.
Anglo American earlier this week said it will slow the building of its $5 billion Quellaveco project in Peru and on Thursday the miner said it’s scaling down operations at its Los Bronces copper mine in Chile.
World no 2 copper producer, Chile’s state-owned Codelco said on Wednesday it planned to reduce its operations while the world’s top miner of the metal, BHP said so far the pandemic has not affected output.
Reuters reports unionized workers at the Escondida mine in Chile operated by BHP requested on Wednesday a halt to operations unless management begins to implement stricter health and safety measures. Escondida is the largest copper mine in the world by a wide measure and was projected to produce some 1.2m tonnes this year.
Phoenix, Arizona-based Freeport-McMoRan said this week it’s suspending operations at its 350kt per year Cerro Verde mine in Peru for at least 15 days.