Copper rose in New York as shrinking inventories of the metal signaled steady demand and a lingering strike at an Indonesian mine reinforced concern about supply.
Stockpiles tracked by the London Metal Exchange dropped for a 14th day today. Copper inventories in Asian warehouses, the ones located closest to top global consumer China, fell for a 28th session. Striking workers at Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine, where a labor action began in September, turned down an offer of a 35 percent pay increase.
“The copper fundamentals still are very, very strong,” Jim Lennon, global head of commodities research at Macquarie Group Ltd. in London, said by phone. “Supply disruptions still matter in the copper market, so that’s going to influence the copper price.”
Copper for December delivery climbed 0.5 percent to $3.553 a pound by 10:10 a.m. on the Comex in New York, advancing for a first session in three. Copper for three-month delivery rose 0.3 percent to $7,852 a metric ton on the LME.
Total LME inventories declined 0.7 percent to 412,325 tons, the lowest level since Feb. 23, daily exchange figures showed. They’re down 14 percent from this year’s peak on June 10. Asian copper stocks have dropped 16 percent in November, on course for a sixth retreat, after plunging 34 percent last month.
Orders to draw the metal from LME stocks, or canceled warrants, fell 4.7 percent to 38,175 tons. They have slid 37 percent in three sessions after jumping 29 percent on Nov. 3.
About 8,000 workers at Grasberg, which has the world’s largest recoverable reserves of copper, have been on strike since Sept. 15 demanding higher pay. The complex is producing at 5 percent of its daily capacity of 230,000 tons of ore, Thamrin Sihite, director general of mineral resources and coal at the Energy Ministry, said on Nov. 3.
Demand for copper, used in pipes and wiring, is set to outpace supply by 485,000 tons this year, according to Barclays Capital. Mine production may drop 1.9 percent, Nicholas Snowdon, an analyst at the bank, wrote in a report e-mailed yesterday. Lower output would mark the first annual decline since 2002, Barclays said.
Tin, lead and zinc rose in London. Aluminum and nickel fell.
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