Antofagasta Rises to Record as Copper Gains on Dollar
Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, rose to a record in London trading as a slumping dollar lifted prices for the metal to the highest level in almost 27 months.
Antofagasta gained 44 pence, or 3.5 percent, to 1,313 pence at the 4:30 p.m. close in London trading. The climb increased the company’s market value to 12.9 billion pounds ($20.5 billion) and extended this year’s gain to 32 percent.
“The weak dollar is benefiting the copper market and copper prices,” Charles Kernot, an analyst at Evolution Securities Ltd. in London, said by phone. “That’s helping the copper producers’ shares.”
Copper for three-month delivery on the London Metal Exchange added as much as 1.8 percent to $8,326 a metric ton, the highest level since July 14, 2008. Prices climbed on speculation that the Federal Reserve will take more steps to spur the U.S. economy, weighing on the dollar.
A weaker U.S. currency makes dollar-priced metals cheaper in terms of other monies. The Fed bought $1.75 trillion of mortgage debt and Treasuries from August 2008 through March of this year in an effort to boost growth through so-called quantitative easing. The Bank of Japan said yesterday it will set up a $60 billion fund to buy assets.
“There are lots of discussions of quantitative easing taking place at the moment, so investors are pricing commodities and pricing the dollar accordingly,” Kernot said.
Kazakhmys Plc, Kazakhstan’s biggest copper-mining company, rose 3.9 percent in London. Xstrata Plc, the world’s fourth- biggest producer of the metal, added 3.8 percent. BHP Billiton Ltd., the largest mining company, gained 3 percent, and Rio Tinto Group, which ranks third, climbed 3.5 percent.
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