Congo crisis heightens copper crunch

There's a funny thing about the 20% surge in copper prices over the past two months.

While there's a great theory about coming demand for the metal a US Congress that's decided to stimulate rather than starve the economy, and a fillip for Chinese exports from a declining yuan there's precious little evidence that consumption is actually picking up.

A supply crunch rather than a demand surge is a much better explanation for what's going on. If further evidence was needed, keep an eye on events in the Democratic Republic of Congo, a top-five copper producer that's entering a political crisis.


With President Joseph Kabila refusing to step down, security forces and protesters are reported to be digging in for clashes on Monday, the day his term officially ends.

The risk for the copper market is that the tensions return the country's output to the levels of the early 2000s, when the deadliest conflict since World War II left production at less than 10% of its current level.