An accident at Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine is drawing comparisons with a 2003 landslide at the same Indonesian operation that helped trigger an unprecedented five-year surge in copper prices.
Carmakers from Ford Motor Co. to Audi AG and Jaguar Land Rover Plc are using record amounts of aluminum to replace heavier steel, providing relief to producers of the metal confronting excess supplies and depressed prices.
Copper slumped into a bear market in London and New York, capping the biggest weekly drop in 16 months, on concern that slowing economies from China to the U.S. will reduce demand as supply of the metal expands.
Demand for lead in Japan, the third-biggest economy, is set to climb as the country seeks batteries and generators to help it recover from the destruction caused by its strongest earthquake on record and tsunami.
The proposed additional delivery requirement at warehouses monitored by the London Metal Exchange should help limit the potential for spikes in metal premiums caused by long wait times at some locations, according to Barclays Plc.
Copper stockpiles in warehouses monitored by the London Metal Exchange climbed to the highest level in almost 16 months on deliveries amid weak demand and incentives storage companies offer to attract metal.
Copper supplies relative to demand will fall to a four-year low as operating glitches, labor shortages and declining ore-grade quality cut mine supplies, boosting prospects for a price rebound, Barclays Capital said.