With production down, miners are having to search farther and dig deeper to access copper.

On June 7, copper prices hit a four-and-half-year high of more than $7,300 a tonne. Just 10 weeks later, on August 15, the price of copper languished at below $6,000 a tonne, down 19 percent from June and the lowest level since July 2017.

Amidst the hurly burly of screens updating in nanoseconds, it is difficult to focus on what ultimately drives prices: supply and demand. Copper supply doubled between 1994 and 2014. Year-on-year growth peaked in 2012, but has been falling sharply since (see the chart below). The immediate supply concerns of the summer have been resolved. The labor disputes at Escondidaand another Chilean mine, Caserones, ended in August. But the medium-term supply picture is less bright.

The Five Mines

Freeport-McMoRan''s (NYSE:FCX) Grasberg mine in Indonesia is expected to contribute around 1 percent of global copper supply in 2019, down from 6.5 percent in 2002, according to analysts at Bank of America Merrill Lynch. New supply is concentrated in just five mines - Escondida, Cobre Panama, Quebrada Blanca, Spence and Kamoto. The BAML analysts calculate that these mines will account for 80 percent of base case output increases between 2018 and 2022. If prices were to fall below $5,000/ tonne, around 80 percent of this new production would be unprofitable with an internal rate of return (IRR) target of 15 percent. 有色金属展-铜材展-2019年广州国际有色金属工业（铜业）展览会 -2019 China(Guangzhou)Int’l Non-Ferrous Metal（Copper）Exhibition -Non-Ferrous Metal exhibition, 2019 Non-Ferrous Metal exhibition, Non-Ferrous Metal expo, 2019 Non-Ferrous Metal expo, Copper exhibition, Copper expo, 2019 Copper exhibition, 2019 Copper expo, China Copper exhibition, China Copper expo