LONDON: Copper hovered near its highest in two years on Friday, supported by supply disruptions, though souring US-China relations and rising coronavirus infections kept gains in check. Three-month copper on the London Metal Exchange (LME) edged 0.1% higher to $6,455.50 a tonne by 1633 GMT, logging its ninth straight week of gains.
The industrial metal, also seen as a bellwether for economic health, rallied to its highest in nearly 25 months on Monday at $6,633 a tonne on supply worries in top producer Chile. But analysts say the price might be overheating and see fair value around $6,000 a tonne.
"On the fundamental side, copper has gotten ahead of itself," said Colin Hamilton, managing director of commodities research at BMO Capital Markets. Large holdings of copper warrants and cash contracts have fuelled concerns about nearby supply on the LME market. The concerns can also be seen in the premium for cash copper over the three-month contract, which is at $7 a tonne, compared with a discount of $30 a month ago.
The global miner said that total mined copper production reached 132,800 tonnes in the three months to June 30, beating a consensus forecast of 114,000 tonnes. Aluminium dipped by 0.5% to $1,662 a tonne, zinc fell 1.9% to $2,183, lead lost 2% to $1,821, tin was steady at $17,375 and nickel was down 2% at $13,185.
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