Rebound after rather bad US data weighed on the dollar making commodities and metals cheaper for holders of other currencies MARIE-LOUISE GUMUCHIAN Published: 2011/06/07 07:24:45 AM COPPER gained yesterday, buoyed by a softer dollar following weak economic data out of the US and output disruptions in producer Chile. Three-month copper on the London Metal Exchange traded at $9166 a ton yesterday morning from a close of $9099 on Friday. There was no trade on the Shanghai Futures Exchange due to a one-day holiday in China. "What we’re seeing today is a bit of a rebound after rather bad US data ... which has weighed on the dollar and given support to the euro," Danske Bank analyst Christin Tuxen said. A cheaper dollar makes metals cheaper for holders of other currencies. Support also emerged after news that Chile’s fourth-biggest copper mine, Codelco’s El Teniente, was producing at less than half of capacity for a second day after most staff workers stayed home to avoid violence by striking contractors. El Teniente, which produces about 2,5% of the world’s mined copper, or 404000 tons a year, continued to work with a skeleton staff to keep production at 40% of capacity by processing stocked material. In producer country Peru, left-wing former army commander Ollanta Humala was headed for victory in a presidential poll and struck a conciliatory tone as investors and opponents worry he will ruin a long economic boom. "Mr Humala’s campaign has included a pledge to increase Peru’s income from its natural resources sector, with windfall taxes on mining profits and reduced exportation of natural gas," Liberum Capital said in a note. "The most exposed of the miners to Peru are Xstrata and Hochschild and we expect a period of underperformance until the fiscal implications are clearer." Liberum said it expected Mr Humala’s win to be bullish in the short term for copper prices, with Peru accounting for about 8% of world copper mine production. Reuters

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