- Nine refiners to reduce sales in 1Q by 200,000 metric tons
- Freeport shares climb; Aluminum, nickel, tin, zinc advance
Copper futures rose the most in more than a week as Chinese refiners agreed to cut sales of the metal that’s trading near a six-year low.
Nine refiners in the Asian country agreed to reduce sales in the next quarter by a combined 200,000 metric tons, according to people with knowledge of the plan. The move comes as prices have fallen below production costs and smelters want to support prices, the people say, asking not to be identified because the information isn’t public.
Chinese smelters had already pledged to restrict supply next year and stop adding new capacity, while some of the world’s biggest mining companies have announced cutbacks to stem the rout in prices. China’s economic slowdown battered commodities this year and investors are waiting for signs from policy makers about how the government will further help reduce a global glut of metal.
“Any reduction in supply is going to be supportive of prices,” Jason Schenker, the president of Prestige Economics LLC in Austin, Texas, said by telephone. "From a fundamental and technical position, the number of supportive factors have been increasing."
Copper futures for delivery in March rose 2.8 percent to settle at $2.1365 a pound at 1:16 p.m. on the Comex in New York, the biggest increase since Dec. 18.
Copper suppliers including Jiangxi Copper Co. and Tongling Nonferrous Metals Group Co. have pledged to reduce output next year by 350,000 tons, according to a statement from the companies on Dec. 1. Calls to the offices of Jiangxi and Tongling’s board secretaries seeking comment on the report of a sales cut weren’t returned.
Shares of Freeport-McMoRan Inc., the world’s biggest publicly traded copper producer, rose as much as 6.4 percent. On the London Metal Exchange, copper, aluminum, zinc, nickel, tin and lead gained. Trading on the bourse resumed after a two-session break for the Christmas holiday.