Copper futures rose, snapping the longest slump in 15 weeks, after Freeport-McMoRan Copper & Gold Inc. canceled shipments from its Grasberg mine in Indonesia following a shutdown caused by a deadly accident.
Freeport said in a statement today that it declared force majeure on shipments of copper concentrate. Grasberg was closed after an accident killed 28 workers last month. Copper prices dropped in the previous four sessions.
“The Freeport news is enough to bring support to the market,” Harry Denny, a broker at PVM Futures Inc. in Hoboken, New Jersey, said in a telephone interview. “Copper will still be in surplus for the year, but in the short term, this tightens things up a bit.”
Copper futures for July delivery rose 1 percent to settle at $3.2255 a pound at 1:12 p.m. on the Comex in New York. The metal has dropped 12 percent this year.
Operations at Grasberg are shut, except for maintenance, until the government gets the results of an independent probe of the deadly accident at a tunnel on May 14, the Energy and Mineral Resources Ministry said June 5. Another worker died on June 1 after a separate incident. The halt may cut output by about 680 metric tons a day, according to data compiled by Bloomberg.
“The market continues to be tight with relatively low levels of visible stocks and a supply side that is affected by disruptions at existing operations and delays to new production,” Jean-Paul Luksic, the chairman of Antofagasta Plc, said today in a statement. The company, based in London, runs four mines in Chile.
BHP Billiton Ltd.’s Escondida site in Chile is the world’s largest copper mine, followed by Grasberg. Freeport, based in Phoenix, is the biggest publicly listed producer. Force majeure is a legal clause allowing companies to miss deliveries because of circumstances beyond their control.
On the London Metal Exchange, copper for delivery in three months gained 0.8 percent to $7,120 a ton ($3.23 a pound).
Nickel extended a decline to the lowest since July 2009. The price dropped for the sixth straight session, the longest slump this year. Today, stockpiles monitored by the LME rose 0.5 percent to the highest since at least 1979.
Aluminum and tin fell in London, while zinc gained. Lead was unchanged.