Metals Rebound as Glencore to Codelco Give Optimistic Outlooks

  • Supplies seen tightening in long term after investment dropped
  • Zinc on the London Metal Exchange gains most since mid-April

Industrial metals rebounded from the lowest in a month as major producers from Glencore Plc to Codelco gave optimistic longer-term outlooks after supply gluts and low prices deterred production.

Zinc rose as much as 3.6 percent on the London Metal Exchange and mining stocks extended gains for the fourth time in five sessions. Consumption is set to exceed supply for zinc and some other metals as output challenges remain due to quality of resources and a scarcity at current prices, Swiss commodities trader Glencore said in a presentation for a conference in Miami, citing estimates from Morgan Stanley and Citigroup Inc.

Codelco, the top copper miner, sees prices rising toward the end of next year as investment cuts hasten re-balancing of supply and demand, Chairman Oscar Landerretche said in an interview in Miami.

“We start to look at metals prices and say this is what the markets are supposed to do: prices got too high, come back down and supply starts to tighten,” Frank Cholly, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “That’s what we’re going through, and we’ve seen it through commodities across the board.”

Zinc Climbs

Zinc for delivery in three months climbed 3 percent to settle at $1,903 a metric ton at 5:50 p.m. on the LME. Copper, aluminum, nickel, lead and tin also gained. The LMEX Metals Index, which tracks the six main metals traded on the LME, gained 0.9 percent, rebounding from a one-month low.

The Bloomberg World Mining Index increased 2.1 percent, led by gains in Freeport-McMoRan Inc., the world’s biggest publicly traded copper miner.  Vancouver-based First Quantum Minerals Ltd. surged 7 percent in Toronto. On the Comex in New York, copper futures for July delivery climbed 0.5 percent to $2.1035 a pound.

Copper inventories in warehouses monitored by the LME rose for a seventh day, the longest run since August, to 161,625 tons, exchange data show.

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