Copper rallies after top producer Chile shuts border

LONDON: Copper prices climbed on Tuesday in response to supply concerns after top producer Chile closed its borders following a spike in coronavirus infections.

Benchmark three-month copper on the London Metal Exchange (LME) was up 3.1pc to $9,059 a tonne by 1720 GMT.

Coronavirus cases in Chile surged past 1 million, while infections across Latin America, which has some of the world's biggest copper mines, are also rising.

Alastair Munro at broker Marex Spectron said news Chile had closed its borders had spurred the latest rally even though authorities said the measures should not disrupt mining.

Copper and other base metal prices were also supported by data showing that activity accelerated and beat expectations in the services sector of the United States and China.

Copper is used as a gauge for global economic health.

SUPPLY: Chile's Codelco, the world's biggest copper miner, increased production by 2.1pc year-on-year in February to 122,800 tonnes, state copper commission Cochilco said.

Overall, however, Chile's February output was down 5pc to 430,100 tonnes.

DEMAND: The Yangshan copper premium was at its lowest since early December at $57 a tonne, pointing to weakening demand for imports into China. Stockpiles of the metal in exchange warehouses have been rising steadily.

TIN SUPPLY: Tin prices rose 2.7pc to $25,800 a tonne, after touching a three-week high of $26,065 on supply concerns, amid environmental checks and smelter maintenance in China and after China restricted movement in Ruili on the border with Myanmar, citing the spread of COVID-19.

Myanmar in 2020 accounted for more than 95pc of imports of tin concentrate into China, the world's biggest metals consumer.

OTHER PRICES: LME aluminium rose 1.8pc to $2,266 a tonne, zinc advanced 2.1pc to $2,834, lead added 0.2pc to $1,966.50, while nickel edged up 3.3pc to $16,575.