- Freeport adds to curtailments in copper as commodities slump
- People are "thinking things could get worse in China"
Copper futures climbed for a second straight day after Freeport-McMoRan Inc., the biggest publicly traded producer of the metal, announced additional reductions in output.
Freeport extended spending and production cutbacks as the company battles to preserve cash in the deepening commodity meltdown. Copper also rose as the dollar headed for its first decline in four sessions, boosting the appeal of commodities as alternative assets.
The metal has slumped 27 percent in 2015, as years of increased output from miners created global production surpluses just as slower economic growth from China erodes demand. Mining companies are taking steps to stem losses and bolster their balance sheets with industrial metals stuck near six-year lows. Anglo-American Plc is shrinking its business to a fraction of its former size by selling assets and closing mines, while Glencore has said it will curtail output.
“A lot of this talk about production cuts, particularly more talked about in the base-metals sector, is going to have some affect on the market,” David Meger, the director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. The rise “is also indicative in the weakness of the dollar today.”
Copper futures for March delivery climbed 0.6 percent to settle $2.066 a pound at 1:18 p.m. on the Comex in New York, gaining for the fourth time in five sessions. The metal rose 0.1 percent on Tuesday.
Shares of Phoenix-based Freeport gained as much as 11 percent to $7.48 in New York, among the best performers in the Bloomberg Americas Mining Index. The stock has plummeted more than 70 percent in the past year. Anglo, which scrapped its dividend on Tuesday, retreated as much as 14 percent in London.
Aluminum, lead, tin and zinc advanced on the London Metal Exchange, while copper and nickel declined.