Antofagasta and BHP Bring Belated Boost to Laggard Copper PricesBy
Metal gains in London as Antofagasta curbs output expectations
BHP CEO highlights positive outlook; London mining stocks jump
Antofagasta Plc and BHP Billiton Ltd. are bringing a belated boost for copper prices.
Copper, a laggard among industrial metals this year, advanced as the miners offered a better outlook and tempered glut concerns.
Antofagasta Chief Executive Officer Ivan Arriagada said the company is focused on profit rather than maximizing production. That’s after announcing that output will be at the lower end of its 710,000 to 740,000 metric-ton target. Melbourne-based BHP projected an improving long-term outlook for copper and oil.
“We’ve seen a stronger demand in the first half in China,” Arriagada said in a Bloomberg TV interview. “Medium term, we think the market will get tighter and prices will start to increase.”
Copper rose 0.9 percent to settle at $4,811 a ton at 5:50 p.m. on the London Metal Exchange. The metal has climbed 2.3 percent this year, trailing the 9.8 percent gain in an index of the six main metals traded on the LME.
The world is not about to be swamped by copper, Citigroup Inc. analysts said in an e-mailed note Tuesday. Growth in supply will fall significantly short of demand through 2020, alleviating the bearish sentiment that’s weighed on copper, according to the report.
Santiago-based Antofagasta jumped as much as 9.9 percent in London trading, the most since March, after reporting first-half results. A gauge of 18 global base metal producers rallied 1.9 percent, led by Antofagasta and Vale SA.
BHP, reporting its lowest underlying profit since 2001, said the worst of the declines in commodities prices may have passed. “We’re particularly positive for the outlook for oil and copper,” CEO Andrew Mackenzie said.
In other metals:
- Aluminum, tin and lead also gained on the LME, while zinc and nickel declined.
- On the Comex in New York, copper futures rose.
— With assistance by Manus Cranny