Copper has surged to its highest in more than three months as jitters about supplies from top producer Chile spurred
investor buying while uncertainty about the US debt crisis capped gains.
|||Copper surged on Friday to its highest in more than three months as jitters about supplies from top producer Chile spurred
investor buying while uncertainty about the US debt crisis capped gains.
Benchmark copper on the London Metal Exchange was trading at $9,802 a tonne at 11:11 SA time from $9,815 at the close on Thursday. The metal used in power and construction earlier touched $9,895 a tonne, its highest since April 11.
Copper prices have been boosted in recent days by a strike at the world's biggest copper mine, Chile's Escondida, which halted concentrate sales on Wednesday, reinforcing fears about shortages of the metal.
Chances of a prolonged strike are growing and the industrial action has sparked stoppage threats across mines in Chile, the world's top copper producer.
“The supply situation in Chile is arguing for higher prices,” said Peter Fertig, a consultant at Quantitative Commodity Research. “But failure to reach a solution on the US debt solution could compromise growth and demand.”
Eyes are on the United States where Republican leaders will scramble to rescue their budget deficit-cutting plan on Friday after conservatives mounted a rebellion that heaped uncertainty on efforts to avert a catastrophic debt default.
House of Representatives Speaker John Boehner's failure to round up enough support for his plan on Thursday exposed a rift in the Republican Party that is hampering efforts to reach a compromise to raise the US debt ceiling before a Tuesday deadline.
That has all undermined the dollar, which when it falls makes commodities priced in dollars cheaper for holders of other currencies.
CHINA TALK
The United States is the world's second-largest copper consumer after China, which accounts for about 40 percent of global demand estimated at 21 million tonnes this year.
China for much of the year so far has been absent from the international market, but analysts expect the country's consumers to come back to the market.
That will eventually be reflected in stocks of copper in LME registered warehouses, at 466,550 are down more than 11,000 tonnes since early June.
Traders are looking at cancelled warrants - material tagged for delivery - in Asian warehouses, particularly South Korea, a location from which copper travels to China.
“There's a lot of talk about China coming back, but we haven't seen much sign of this yet,” a copper trader said.
Aluminium stocks in LME approved warehouses stand at 4.45 million tonnes, down from record highs above 4.7 million tonnes in May.
Stocks of deliverable aluminium in warehouses monitored by the Shanghai Futures Exchange (SHFE) fell more than 10 percent to 181,715 tonnes.
“Power curbs have started to affect some smeltering activity as domestic consumption remains strong. This exacerbates the ongoing stock draw down at SHFE warehouses,” Credit Suisse Private Banking said in a note.
“Strong auto demand and the development of social housing are currently boosting increased use of aluminum in China.”
Three-month aluminium on the LME was trading at $2,627 a tonne from $2,638 at the close on Thursday, zinc at $2,497 from $2,519 and lead at $2,647 from $2,655 a tonne.
Tin was at $28,550 from $28,500 and nickel at $24,570 from Thursday's last bid at $24,550. - Reuters
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