Copper Snaps Losing Streak as Mine Disruption Eases Glut Concern

Updated on
  • Codelco’s Chuquicamata stops mining after two workers die
  • Zinc in Shanghai advanced to the highest level in five years

Copper rose for the first time in eight days after a mine in Chile was halted and a potential strike at another operation raised the prospect of supply disruptions at the biggest copper-producing nation.

Codelco closed its Chuquicamata mine Tuesday after a vehicle crash left two dead. While the state miner resumed processing of stockpiled material on Wednesday, at its smaller Salvador mine, workers are voting on whether to accept a pay offer or go on strike. A separate accident Tuesday interrupted operations at another Chilean mine, operated by Freeport-McMoRan Inc.

“That sort of news obviously has an impact,” Steve Hardcastle, head of industrial commodities client-services at broker Sucden Financial Ltd. in London, said by phone. “But I don’t think it’s going to be sustained. Copper is finding a solid base at around $4,600.”

The red metal for delivery in three months rose 0.2 percent to settle at $4,617 a metric ton at 6:30 p.m. on the London Metal Exchange. Lead and tin also advanced, while aluminum and nickel declined and zinc was little changed.

Copper is rebounding after closing on Tuesday at the lowest since June 17. It still finished down more than 6 percent in August, its first monthly decline since May, amid rising inventories in LME-tracked warehouses. At the same time, growing expectation that the Federal Reserve will raise U.S. interest rates this year is strengthening the dollar, which makes commodities more expensive in other currencies.

“While the shadow of Fed rate hike this year looms over the complex, it will be challenging for the market to maintain traction to the upside, though we might just be becalmed within a broad treading range for now,” said Michael Turek, the head of base metals at BGC Partners Inc.