Copper strides to 5-month high on fears about Chile output
- "That being said, there is mounting evidence that they're starting to struggle with pockets of outbreaks at mines and the pushback from trade unions for safer working practices."
- "There are tentative signs that the post-lockdown economic recovery is perhaps progressing a bit quicker than most had thought."
LONDON: Copper prices touched a five-month peak on Friday on growing fears that output will be disrupted in top producer Chile by worsening COVID-19 infections at mines.
Chile's Codelco, the world's biggest copper miner, suspended refinery and foundry operations at its Chuquicamata division to prevent further spread of the new coronavirus.
"Chile has been one of the fortunate producers. It hasn't suffered too much from the outbreak and government lockdowns didn't really have much of an impact on production in the first four months of the year," said Kieran Clancy, assistant commodities economist at Capital Economics.
"That being said, there is mounting evidence that they're starting to struggle with pockets of outbreaks at mines and the pushback from trade unions for safer working practices."
Three-month copper on the London Metal Exchange had climbed 1.2% to $5,963 a tonne by 1150 GMT, the strongest since January 24. It was on track for a 2% weekly gain, its sixth straight weekly rise.
Capital Economics has recently upgraded its copper forecast and is now expecting the LME price to end the year at $6,200 a tonne, Clancy said.
"There are tentative signs that the post-lockdown economic recovery is perhaps progressing a bit quicker than most had thought."
The Shanghai Futures Exchange is closed for a public holiday on Friday.
CHILE COPPER: Chile's copper production losses could be greater than the government's estimate of 200,000 tonnes, equivalent to 3.5% of total output, analysts at ANZ said in a note.
PERU: In Peru, ANZ said the pandemic-related capacity closures have affected about 2 million tonnes of copper supply.
ALUMINIUM STOCKS: LME aluminium stocks extended their rise, adding 14,275 tonnes to 1,652,025, the highest since April 2017, having shot up 70% since mid-March, LME data showed.
LME aluminium shrugged off the signs of surpluses, adding 1.2% to $1,588 a tonne.
PRICES: LME zinc advanced 0.4% to $2,058.50, nickel gained 2.1% to $12,705 a tonne, and tin rose 1% to $16,740, while lone loser lead slipped 0.2% to $1,782.
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