SYDNEY, Mar 26: London copper edged up on Thursday after a raft of weather-related mine closures in top producer Chile underpinned prices, but clouds over China’s growth prospects curbed upside momentum.
Torrential downpours in the north of Chile have forced companies to suspend operations at some major mines, putting an estimated 1.6 million tonnes of capacity of the red metal on hold.
Analysts have been whittling down their forecasts for a surplus this year due to declining ore grades, processing problems and bad weather, which has supported prices. ‘Supply challenges should dominate although the Chinese numbers remain a little bit of a drag on demand,’ said analyst Dominic Schnider of UBS Wealth Management in Hong Kong. ‘The next target for copper is $6,350.’ Three-month copper on the London Metal Exchange firmed by 0.2 percent to $6,138.50 a tonne by 0256 GMT after small losses in the previous session. Prices hit the highest since Jan. 5 at $6,203.50 a tonne on Tuesday on prospects the United States might delay a hotly anticipated rate hike until later this year. The most-traded June copper contract on the Shanghai Futures Exchange climbed by 0.5 percent to 43,880 yuan ($7,064) a tonne. Floods may disrupt Chilean supply short term, but are unlikely to quell a supply threat that has come from a long drought in world’s biggest copper producer, added Schnider. ‘You have floods in Chile, but nothing is getting absorbed. My observation would be it’s not changing the structural water shortage,’ he added.
Reflecting scant buying demand for copper in top user China, Shanghai premiums on a cost insurance and freight (CIF) basis fell $5 to $70-$85. In other metals, nickel climbed away from 14-month lows, up 0.7 percent to $13,770 a tonne, on expectations of tighter supply, even as its demand prospects worsened. The European Union will impose anti-dumping duties from Thursday on imports of cold-rolled flat stainless steel from China and Taiwan, according to a notice on Wednesday in the EU’s Official Journal.
(AGENCIES)
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