- Inventories in warehouses tracked by LME at eight-month low
- Aluminum price falls to lowest since June 2009 in London
Copper climbed for the first time in five days as inventories fell to an eight-month low and concern mounted that a mine strike will disrupt production in Peru, fueling speculation that supplies may be tighter than expected.
Workers at Chinalco Resources Corp.’s Peruvian unit, which operates the Toromocho copper mine, are on strike, the company said in a statement. A company spokesman said copper output hasn’t been affected. Stockpiles in warehouses tracked by the London Metal Exchange fell for a third straight day to the lowest since Feb. 4.
“Obviously, if things don’t progress as the group striking wants it to, it has the potential to be a problem for copper,” Tim Evans, the chief market strategist at Long Leaf Trading Group Inc. in Chicago, said in a telephone interview. With the drawdown in inventories, a mine closure “would definitely have a supply impact,” he said.
Copper for delivery in three months rose 1.1 percent to settle at $5,232.50 a metric ton ($2.37 a pound) at 5:50 p.m. on the LME. The metal lost 2.5 percent in the previous four sessions. Zinc, nickel and lead also gained in London, while tin fell. Aluminum dropped to the lowest since 2009.
Toromocho capacity is estimated at 180,000 tons this year, or about 1 percent of global copper production, according to John Meyer, an analyst at SP Angel in London. Stockpiles in warehouses monitored by the LME dropped to 280,275 tons.
Riots in Chile and droughts in Zambia and Papua New Guinea also curbed metal supply, with more than 1.5 million tons of copper affected this year, Citigroup Inc. estimated last month.
Copper futures for December delivery climbed 1 percent to $2.3835 a pound on the Comex in New York.