Copper futures rose, heading for the longest rally since January, after an accident at the world’s second-biggest mine triggered supply concerns for the metal used in pipes and wires.
Work has been halted at Freeport-McMoRan Copper & Gold Inc.’s Grasberg site in Indonesia since a tunnel collapsed on May 14, and the death toll has climbed to 17. The mine complex generated $3.92 billion of revenue for the company last year, or 16 percent of sales. Futures climbed as a drop in the dollar boosted the appeal of the metal as an alternative investment.
“The prospect of slowing output in copper is lending a little bit of strength and keeping prices firm,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “The weaker dollar is also prompting some short-covering.”
Copper futures for July delivery rose 1.1 percent to $3.3595 a pound at 12:19 p.m. on the Comex in New York. The price climbed for the third straight session, the longest rally since Jan. 30. BHP Billiton Ltd.’s Escondida mine in Chile is the biggest source of the metal.
Freeport, based in Phoenix, was shipping concentrate, a semi-processed ore, as of May 17, its Indonesian unit said last week. Of 38 workers who had been in a classroom in an underground training facility at the time of the accident, 10 have been rescued and 11 still may be buried under the rubble.
“The controlling company stated it had two-three days of stockpiles that would keep shipments flowing, but several workers remained trapped, and operations have yet to restart,” Morgan Stanley analysts including Peter Richardson said in a report. “It appears output will begin to suffer this week.”
On the London Metal Exchange, copper for delivery in three months climbed 1.4 percent to $7,406 a metric ton ($3.36 a pound). Aluminum, lead, nickel, tin and zinc advanced.
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