Reporting on April 22: In addition to the problems caused by energy to Ukraine and agricultural overseas high inflation pressure, increase the background disturbances in the supply, the international commodity market volatility are also fast at high prices, especially in March 2022, the London metal exchange (LME) nickel futures on the epic squeeze incident, although the market participants, to reflect on the entity industry chain, and regulators, However, there are still situations in the international commodity market, such as crowding and tightening, and we need to be alert to the outbreak of structural contradictions between supply and demand.
In recent years, in fact, is not only a new energy such as lithium, cobalt, nickel metal prices continued to rise, even basic metal copper aluminum zinc at any time is expected to continue to refresh record highs, it sparked a global mineral exploration investment rebound, despite the global mine construction investment increased but far ShuiNan solution near thirsty, especially in South America, Africa and other traditional mining exporter, After the formation of the new government, more left-wing forces seek to gain more benefits from the development of mineral resources, and consider the implementation of laws related to the collection and increase of royalty tax rate in the mining sector, to further raise the cost of mining and share the windfall profits of miners.
Since April, the world's biggest mining nations, led by South America, have seen a series of major supply disruptions, with protests in Peru hitting several major copper mines, including Cuajone, Minmetals' LasBambas and Glencore's Antapaccay. Peru's left-wing government has been reluctant to crack down on the protests, but Prime Minister Fernando Torres said the government was running out of patience to resolve the issue. The LasBambas and Cuajone mines affected by the protests alone now account for about 20% of Peru's copper production, according to official statistics.
On April 21, BHP Billiton (BHP) lowered its production forecast for the world's largest copper mine in Chile after its Escondida project faced protests from workers and environmentalists, as well as labor shortages caused by the pandemic. Escondida, the world's largest copper mine, is expected to produce between 1 million and 1.03 million tonnes of copper this year, down from its previous estimate of 1.02 million to 1.08 million tonnes, leading to a reduction in BHP's total copper production forecast to between 1.57 million and 1.62 million tonnes. BHP has produced 1.112 million tons of copper so far this fiscal year, down 10 percent from last year.
"From the perspective of the development and maintenance cycle of copper mines in the world, large mines have high initial investment and long investment cycle, so it is difficult to increase production quickly in a short time. It takes 5-10 years from resource exploration to mining, and it usually takes at least 2 years to increase production based on the original mine, due to the high risk and long time consuming. "It takes market prices and long-term stability in the local mining environment to incentivize miners to continue investing profitably." Gu Feng Da told reporters that in recent years, the South American left-wing government came to power after the intention to change mining policy, at the same time, the new project put into production and reconstruction of existing project incremental delay because of protests and strikes, global copper supply in 2022 is expected to continue tight pattern can ease but difficult to reverse, the global supply of refined copper elastic finite become a big probability event.
