The London Metal Exchange (LME) saw a declining interest in copper this week. The stock darling of investors, copper had been usurped by lead and tin on the London bourse.
According to a Reuters report, the recent quarterly report of mining company Rio Tinto reflected the current state of copper in the financial market. The report used Rio as a measure because of the mining company's varied assets in its portfolio. Rio's portfolio included the largest copper production hit this year. Its portfolio also has one of the largest greenfield projects. The mining company had also initiated the largest single copper project expansion to date.
In April, the major wall collapse at the US Bingham Canyon copper-gold mine had forced Rio Tinto to write down inventory of 125,000 tonnes of mined cathode and 100,000 tonnes of refined cathode respectively. Cathodes are used to produce copper products. Rio Tinto also had a production hit in its Freeport McMoRan's Grasberg mine based in Indonesia. The Asian mine would be seeing a reduction of production capacity of 100,000 tonnes per year.
Although analysts account for production disruptions, the mine disruptions this year were astronomically high. Although Rio had been making strategic acquisitions to increase its production capacity, its current price at a little above USD7,000 per tonne was a telling sign that investors are veering away from raw materials.
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