Although copper prices have been falling in the near future, supply problems are gradually emerging, which may lead to tighter markets.

Experts say that supply disruptions in Chile, the world's major copper producer, Zambia's political and power problems, and China's restrictions on scrap imports are expected to put pressure on copper supply in the second half of 2019.

The Chuquicamata large coal mine under Chile's state-owned mining company Codelco may have to deal with a strike. Codelco is the world's largest copper producer with a copper production of 1.678 million tons last year.

Last year, Zambia, which produced 860,000 tons of copper, was affected by the mining tax reform and may lose 100,000 tons of capacity this year. In addition, Zambia is also facing a power supply crisis. Experts, Zambia may have a cumulative loss of 1.2 million tons of copper this year.

Given China's restrictions on scrap imports, the probability of importing scrap metal will decrease, which in turn will increase demand for concentrates and refined metals.

According to analysts at the Bank of Montreal Capital Markets, “We expect the gap in refined copper to be about 270,000 tons this year. The consolidation of the concentrate market can also be seen from the processing fee. The processing fee per ton of spot is currently below 60 US dollars, last December. It’s $95.”

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