Copper Buyers Want Longer-Term Deals on Supply Concerns, Codelco Says
Comment of the Day

October 26 2022

Commentary by Eoin Treacy

Copper Buyers Want Longer-Term Deals on Supply Concerns, Codelco Says

This article from Bloomberg may be of interest to subscribers. Here is a section:

Copper buyers are so worried about future availability of the metal that they’re seeking to secure longer-term deals than normal, according to top miner Codelco. 

The Chilean state-owned company recently signed some contracts for three to five years with customers in Europe, in contrast to the more standard annual deals, Chairman Maximo Pacheco said in an interview. 

Eoin Treacy's view

With battery metal prices like lithium still making new highs, the question of where to source affordable component materials is a pressing concern for many companies. Signing long-term offtake agreements is desirable from that perspective but it also represents hedging on behalf of the miners. That’s not a bad idea at this stage since prices are falling and the global economic outlook is uncertain, particularly with China slowing down.

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