Glencore’s announcement that it would suspend production at two of its African copper mines has given a much-needed boost to the metal’s price, but the array of cuts made by miners in recent weeks could have negative effects on the metals market in the medium term.

Glencore announced this week that it will halt production at its Katanga and Mopani mines for 18 months, withdrawing approximately 400,000 tonnes of copper cathode from the market – more than most analysts’ estimates of this year’s oversupply. Combined with an increase in Chinese imports, the announcement led to a 5.3% jump in the price of copper.

This is probably the most extreme reaction to the low prices seen over the past two years, but most copper producers have had to take measures to curb the drop in revenue and keep investors interested. Chile’s state-owned producer Codelco has chosen to redesign its proposed expansion of the Andina mine in an effort to lower investments, and US-based Freeport-McMoRan is reportedly planning to lay off 650 workers and temporarily suspend operations at its El Abra copper mine in Chile.

Caroline Bain, senior commodities economist at Capital Economics, tells GTR: “Glencore’s African operations were high cost, and they struggled a bit with sourcing energy, so this is not a panic move: these mines were struggling anyway. There is definitely a theme whereby copper miners are either delaying expansion plans, cutting jobs or costs, or actually closing in the case of Glencore.

“At the moment the copper concentrate market is amply supplied so we’re not going to have an immediate impact from those decisions, but the pipeline of projects particularly after 2016 is now quite sparse and that’s the time when we would expect to see a significant impact on prices start to seep through.”

I do think we’re going to see more closures of aluminium smelters outside of China, but I see very little prospect of China’s companies closing or shutting up shop. Caroline Bain, Capital Economics

Most analysts are now confident that the price of the commodity has reached its lowest point, and can only go up from here – in fact, undersupply could become an issue in the near future: Citigroup analysts are now forecasting a 284,000-tonne deficit in 2016.

Other metals might not be as “easy” to pull out of the slump. While many aluminium producers (including Russia’s Rusal) are also cutting production, they face competition from Chinese companies showing no sign of reviewing output.

“Aluminium is a very different one in that I do think we’re going to see more closures of aluminium smelters outside of China, but I see very little prospect of China’s companies closing or shutting up shop, in part because a lot of them are quite highly subsidised.

“[Production cuts are] probably what’s needed in the case of copper, because there’s a healthy surplus in the first half of this year, but for aluminium, I think it will just mean that Chinese producers will increase their market share and continue to increase output,” Bain adds.

But despite the commodities downturn, deals are still flowing: just in recent months VDM Metals signed a €300mn borrowing base facility with nine European banks, Kazakh copper firm Kaz Minerals scored a US$50mn revolving credit facility (RCF), and Gunvor Singapore increased its Asian RCF to US$1bn.

As one commodity finance banker tells GTR: “There’s still a steady stream of commodity deals going through – prices go up and down but people always need commodities.”