Copper futures rose to the highest in almost three months on concern that adverse weather in Chile, the world’s biggest producer, and a strike at the Grasberg mine in Indonesia will tighten supplies.
Chile yesterday forecast snow in high-altitude areas in the Atacama Desert, where Codelco and BHP Billiton Ltd. run copper mines. Workers at Freeport-McMoRan Copper & Gold Inc.’s Grasberg, the world’s second-largest source of the metal, are on strike for higher wages. Prices fell yesterday after China, the biggest metal buyer, raised interest rates.
“The market is worried about supply, shrugging aside the increase in rates out of China,” said Robin Bhar, an analyst at Credit Agricole SA in London.
Copper futures for September delivery jumped 10.7 cents, or 2.5 percent, to close at $4.442 a pound at 1:18 p.m. on the Comex in New York. Earlier, the price reached $4.4435, the highest since April 12.
Rain is forecast in Chile’s Antofagasta region, where BHP runs Escondida, the largest copper mine. Output disruptions may exacerbate a projected shortage this year, estimated by the International Copper Study Group to be 377,000 metric tons.
The metal extended gains as U.S. data on jobs and retail sales bolstered optimism in the economy. Forecasts for increasing Chinese imports in the second half of the year supported prices, Michael Widmer, the head of metal-market research at Bank of America Merrill Lynch, said in a report.
On the London Metal Exchange, copper for delivery in three months advanced $219, or 2.3 percent, to $9,740 a ton ($4.42 a pound).
Aluminum, lead, nickel, tin and zinc also rose in London.
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