Copper touched $3.1785 a pound ($7,007 per tonne) in morning trade, the highest since September 2014. Copper is now up by more than 50% compared to this time last year.

The world's number one producer, Chile's Codelco, on Tuesday said first half production from its eight copper operations fell by 5.3% to 798kt from 843kt during the first six months of 2016. Falling grades were blamed for the decline which also added to the state-owned company's cash costs which went from $1.275 to $1.317 per pound of copper.

Despite the loss of output, the state-owned company announced profits just topping $1 billion during the period compared to a $97m loss in 2016 thanks to the recovery in the copper price. The company is pushing ahead with a $1.2 billion desalination plant for its mines in the Atacama desert of the South American nation.

Last week Codelco's chairman joined the chorus expressing doubts about the sustainability of the recent rally in the price:

"I'm a little skeptical…in the short-term," Oscar Landerretche said a mining conference in Chilean capital Santiago. "It's true that all of the fundamentals are good in the medium- and long-term…but I would be very cautious."
Codelco produced over 1.8m tonnes of the red metal for the full year 2016, which was also lower than the year before.