BLBG:Copper May Climb, Rebounding From Three-Week Low, on Concern About Supply
Copper may rise in London, rebounding from a three-week low, on concern supply will fall short of demand as miners seek higher pay.
A strike at the world’s biggest copper mine, BHP Billiton Ltd.’s Escondida in Chile, is completing a second week. Workers at Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine in Indonesia may strike unless talks on a new labor agreement conclude by Aug. 17, a union official said. Miners staged a 24- hour strike last month at Collahuasi in Chile.
“Signs of ongoing union trouble at major copper mines” helped prices, said David Thurtell, Singapore-based head of metals research at Citigroup Inc.
Copper for three-month delivery gained $21, or 0.2 percent, to $9,556 a metric ton by 10:10 a.m. on the London Metal Exchange. Prices yesterday reached $9,520, the lowest level since July 12. Copper for September delivery rose 0.3 percent to $4.337 a pound on the Comex in New York. Aluminum fell for a seventh day.
LME copper climbed as much as 0.8 percent after the Standard & Poor’s 500 Index of shares rose for the first session in eight yesterday and Japanese authorities intervened today to stem an advance by the yen to protect the nation’s economic recovery. The country was the world’s fourth-biggest copper consumer in 2010.
“Metals got a boost from a positive close on Wall Street last night and the Bank of Japan easing monetary policy this morning,” Thurtell said.
Weather, Strikes
Chile’s copper output may be 5 percent below target this year because of weather disruption, project delays and strikes that have curbed production, Diego Hernandez, chief executive officer of Codelco, said in an interview today. The Santiago- based company is the world’s biggest copper producer.
Escondida is losing 2,500 tons of copper-in-concentrate production each day the strike continues, according to Barclays Capital. Copper production will fall short of demand by 670,000 tons this year, the bank estimates.
Aluminum for three-month delivery on the LME declined 0.4 percent to $2,514 a ton. The lightweight metal’s streak of declines is the longest since January 2009.
Prices fell below the 50-day moving average at $2,571.42 yesterday and the 200-day average at $2,515.51 today, prompting funds to close long positions, according to Andrew Silver, a trader at Natixis Commodity Markets Ltd. in London. A long position is a bet on higher prices.
Zinc dropped 0.2 percent to $2,372 a ton. Orders to draw the metal used to rust-proof steel from LME warehouses rose 1.8 percent to 114,950 tons, the highest level since April 2006, on a jump in Malaysia.
Nickel slipped 0.2 percent to $23,760 a ton and tin was unchanged at $26,300 a ton. Lead climbed 0.1 percent to $2,525 a ton.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
