Copper Holds Near Record as Chilean Supply Setbacks Pile Up and Central Banks Turn Sellers
Fatalities at Codelco's El Teniente added to a run of weather and labour disruptions in Chile, keeping copper close to last month's record near $15,000 a tonne, while Kazakhstan's central bank became a gold seller and steel demand was revised lower.
Two subcontractor employees died after a snow avalanche struck Codelco's giant El Teniente mine, the latest consequence of bouts of severe weather that have hit Chile in recent months. The open pit remained halted on Monday while other parts of the operation, including its sprawling underground mines and processing plants, were running normally; the open pit accounts for less than 10% of the mine's total production. Heavy rain and storms have already contributed to a drop in copper output, with flooding and debris flows also causing damage in the capital Santiago.
Labour tensions are adding to supply risk, with workers on strike at Antofagasta Plc's Centinela mine and a separate wage dispute at BHP Group's Escondida. Earlier this month a worker died at Codelco's Radomiro Tomic mine, just over a week after a separate fatal accident at Escondida, and El Teniente was the site of a rock burst in July 2025 that killed six workers and disrupted production. The blows come as the copper market grapples with constrained mine supply, trade dislocations and growing demand, with copper having surged to a record near $15,000 a metric ton last month and futures rising as much as 1% on Monday.
The disruptions also offer a glimpse of the risks facing South American copper mines in the months ahead as El Nino develops, potentially bringing heavier rainfall and flooding to key producing regions in Chile and Peru. Codelco's new leadership under Chairman Bernardo Fontaine is looking to consolidate output around current levels while prioritising value over volume, following a prolonged slump in output that has contributed to a broader decline in Chilean copper production. Some analysts are forecasting further price gains from here.
In precious metals, Kazakhstan's central bank is switching from being one of the world's biggest buyers of gold to a seller, as high Treasury yields reinforce the need to rebalance reserves. Deputy Governor Aliya Moldabekova said the bank wants to lower gold's share of total foreign exchange reserves by about 3 percentage points by the end of the year, to 75% from about 78%, with half of the downsizing coming from selling options and half from physical sales; its gold hoard has climbed to 386 tons and foreign currency reserves stood at $66.4 billion at the end of September. Gold was down about a fifth since the US-Iran war started in late February after peaking at $5,600 an ounce in January, trading at $4,172.35 an ounce and holding a roughly $4,000 to $4,300 range since June.
Steel is pointing in the other direction. The World Steel Association now expects global steel demand to fall 0.1% in 2026, compared with a forecast in April for growth of 0.3%. That leaves the complex split between a copper market tightened by mine disruptions and a flat-to-lower steel call, with Kazakhstan's shift only a partial offset to central bank buying that has continued to be led this year by Poland, China and Uzbekistan.