Copper Gains for 2nd Day on Supply Concern After Quake
Copper climbed for a second day to a three-week high on concern that an earthquake in Chile, the world’s biggest producer, may disrupt supplies.
The contract for delivery in three months on the London Metal Exchange added as much as 1 percent to $6,728.75 a metric ton, the highest intraday level since March 10, and was at $6,675.25 at 10:20 a.m. in Tokyo. Today’s gain pares the metal’s loss this year to 9.3 percent.
A tsunami warning was issued for Chile, Peru and Ecuador after the U.S. Geological Survey reported the earthquake off the coast of Chile. Codelco, the world’s largest producer, said its mines located in the Antofagasta region further south were unaffected. Pan Pacific Copper Co., Japan’s biggest producer, said there’s no damage at its Caserones mine.
“Chile is the world’s biggest producer of copper, so there’s typically a knee-jerk price response whenever there’s a weather-related event on a significant scale that could potentially impact production,” said Gavin Wendt, the founder and senior resource analyst at Mine Life Pty in Sydney.
Teck Resources Ltd. said its Quebrada Blanca copper mine was unaffected. The mine neighbors the larger Collahuasi copper pit. Anglo American Plc and BHP Billiton Ltd. operate copper mines in northern Chile. Spokesmen for the two companies were unavailable for comment.
“The earthquake news fueled concern that production in the country may be disrupted,” said Chae Un Soo, a metals trader at Korea Exchange Bank Futures Co. in Seoul. “Investors are now looking for more reports from mining companies there.”
On the LME, nickel also climbed, while lead and zinc were little changed. Aluminum fell and tin was unchanged.
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