Financial Associated Press (Shanghai, editor Xia Junxiong) -- Chile's copper production in September hit its worst monthly record since February, owing to frequent strikes by workers and declining ore grades.
Data released by Chile's National Bureau of Statistics (INE) on Friday showed the country's copper production was 451128 tonnes in September, down 6.9 percent year-on-year and down 3.4 percent from August.
Chilean unions have been able to exert greater influence due to strong market demand, which has allowed copper prices to soar to record highs this year, exacerbating tensions in labor negotiations, such as a nearly month-long strike at the andina mine of Chile's National Copper Company (codelco). On the other hand, the aging of mines in Chile has caused the quality of ore to continue to decline.
According to the latest released data, Chile's copper production fell by 4.2 million tons at the end of September, down 1.9% compared to the total national production in 2020.
As the world's largest copper producer, the decline in chilean copper production could further exacerbate the tight supply situation in the market.
Earlier this month, LME copper inventories fell to their lowest level since 1974, and in the past two months, free-to-use stocks in LME-monitored warehouses have fallen by more than 90 per cent as orders surged.
Commodities consultancy CRU Group estimates that the copper industry will need to spend more than $100 billion by 2030 to cover the annual supply gap of 4.7 million tonnes.
Copper is a key metal driving renewable energy and electric vehicles, and its uses are very wide-ranging, from building materials to batteries and engines. If the major copper-producing countries represented by Chile are unable to solve the capacity problem, copper prices will continue to rise, which is not conducive to the global energy transition to cope with the climate crisis.