The ban on copper ore exports, which was announced by Indonesian President Joko Widodo on Friday and will take effect from mid-2023, could send global metal prices up 20%, as well as increase demand for Russian copper, metal markets expert Leonid Khazanov told RIA Novosti.
“The suspension of exports of the ‘red metal’ from Indonesia may lead to an increase in orders for copper from our country, one of the world’s largest producers of copper,” said Khazanov, pointing out that around 1 million tonnes of copper are smelted in Russia annually.
Khazanov estimates that Indonesia’s export ban will affect the global market. The copper inventories in the warehouses of the London Metal Exchange (LME) will decrease faster until the volumes taken from the market are compensated for, which, according to the expert, “will lead to a shortage of this metal, since it is impossible to quickly increase mining of copper ore and, accordingly, copper production.”
Khazanov anticipates that this will also result in new, higher prices:
“Prices can rise by 20% in a few days without prerequisites for a quick decline,” he said.
Benchmark LME copper futures had already rallied to above $9,400 per tonne on Wednesday from around $8,500 per tonne at the beginning of the year.