Chile copper output hits nine-year low, adding to supply concern

Chile posted its lowest monthly copper output in almost nine years, highlighting the challenges facing the world’s top producer as ore grades decline and key mines underperform.

Production totaled 378,554 metric tons in February, down 8.5% from January and 4.8% from a year earlier, according to data released Tuesday by the statistics agency INE. It was the lowest since March 2017, when a strike halted operations at BHP Group’s giant Escondida mine.

While no major disruptions were reported last month, rains in northern Chile and high seas can interrupt logistics in summer months when some mines also tend to do maintenance work.

In January — the latest month for which a production breakdown by company is available — state-owned Codelco’s output fell 45% from December levels, an unusually steep drop even considering year-end shipments and inventory adjustments.

Beyond seasonal factors, Chilean output has declined on a running 12-month basis for seven straight months, weighed down by setbacks at projects aimed at accessing higher-grade ore.

Given Chile accounts for about a quarter of the world’s mined supply, that slide underscores the broader supply constraints that helped drive prices to record levels in January before easing in early February and retreating further during the Iran conflict.

(By James Attwood)