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Copper Rises as Indonesia Ban Set to Curb Supplies of Metals

Copper advanced in London, poised for a weekly gain, on expectation a planned ban on all ore exports from Indonesia will curb supplies. Nickel and aluminum rose and tin reached the highest in more than five weeks.

Production at PT Freeport Indonesia’s Grasberg copper mine, the world’s second-largest, may fall to 30 percent to 40 percent of maximum output, Rozik B. Soetjipto, the company’s president director, said today. Indonesia’s government will ban all mineral-ore exports next year after the plan received backing from parliament, Energy and Mineral Resources Minister Jero Wacik said. The country is the world’s biggest producer of mined nickel and the leading exporter of tin.

“The parliament seems adamant about it,” Stephen Briggs, an analyst at BNP Paribas SA in London, said by phone today. “It seems more and more serious about this ban for these bigger metals - nickel, bauxite, maybe even copper. The market will sense with copper they are not going to back down.”

Copper for delivery in three months rose 0.7 percent to $7,118.50 a metric ton by 11:04 a.m. on the London Metal Exchange. The metal is up 0.9 percent this week. Futures for delivery in March rose 0.5 percent to $3.247 a pound on the Comex in New York.

LME nickel added 0.7 percent to $13,848 a ton after rising to the highest level since Nov. 11 yesterday. The metal is heading for the biggest weekly gain since Oct. 25. Tin climbed as much as 1.1 percent to the highest since Oct. 30.

“There is no direct impact on tin because its regulations have already been tightened up anyway,” Briggs said. “But there are two things that would push tin as a result of this. It increasingly convinces the market Indonesia is not going to back down. Two, the tin market is quite tight.”

Record

Aluminum for delivery in three months on the LME climbed 1.1 percent to $1,777 a ton on the LME after orders to withdraw stockpiles from LME-monitored warehouses surged to a record 2.33 million tons. Indonesian ban includes exports of bauxite, a raw material used in production of the metal.

Stockpiles of copper monitored by the LME fell 0.8 percent to 408,100 tons, the lowest since Feb. 18, data showed today. Bookings to withdraw the metal from LME warehouses climbed 3.2 percent to 270,400 tons as New Orleans orders climbed to a record.

Copper also rose before reports that may show the U.S. unemployment rate fell to 7.2 percent last month and payrolls rose by 185,000 workers in November, data may show today. Lead and zinc also advanced on the LME.

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

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