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METALS-London copper finds modest support after overnight rout
February 24, 2017 / 2:38 AM / 9 months ago

METALS-London copper finds modest support after overnight rout

* LME copper finds modest support

* Follows 3 pct fall overnight

* China demand doubts counter supply pinch in Chile, Indonesia (Updates prices)

By James Regan

SYDNEY, Feb 24 (Reuters) - London copper prices found modest support on Friday after a big fall overnight amid fresh doubts over Chinese demand and some upward movement in the U.S. dollar, but were still on track for a weekly decline of around 2 percent

Traders said worries persist about consumption levels in China after the country’s housing minister on Thursday suggested moves were afoot to stabilise the property market.

Three-month copper on the London Metal Exchange was up 0.8 percent at $5,907 a tonne by 0700 GMT after falling 3 percent in the previous session.

“Copper is below $6,000 (a tonne) again, but the drop may be seen as a little overdone, explaining the uptick today,” said a commodities trader in Sydney who did not want to be named. “But I don’t see all the losses being erased.”

Strike action at the Escondida copper mine in Chile, accounting for about 6 percent of world supply, was offering support, although the strike “at least in the short term” was largely factored into the market, the trader added.

Operator BHP Billiton’s decision this week to delay its legal right to replace striking workers is seen a move aimed at sacrificing some output to undermine the union’s position.

BHP made a surprise announcement on Tuesday, saying it would not seek to exercise its right to replace the 2,500 striking workers after 15 days - which would have been Friday. Instead, it said it would wait at least 30 days.

A halt to the big Grasberg copper mine in Indonesia by Freeport McMoRan was also giving copper bulls solace.

The row, which centres around the sanctity of Freeport’s 30-year mining contract, comes as Indonesia seeks to squeeze more revenue out of its mining industry through a shake-up of regulations over foreign ownership and ore processing.

“Given their size, lengthy disruptions at either will eat into this year’s normal 5 percent disruption allowance,” GFMS, a Thomson Reuters company providing independent specialist metals market content and analysis, said in a recent report.

“But unless accompanied by other major disruptions they are still unlikely to prevent another year of surplus in the refined copper market.”

The most-traded copper contract on the Shanghai Futures Exchange was down 1.67 percent at 47,760 yuan ($6,950)a tonne. The contract dipped by as much as 2.9 percent at the open.

Lead and zinc were each up about 1 percent after closing lower overnight.

Zinc prices are still nearly double the levels seen in January 2016 due to deficits arising from mine closures and shutdowns.

In Shanghai, aluminium was off 1.65 percent and zinc down 1.2 percent.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.8716 Chinese yuan Reporting by James Regan; Editing by Richard Pullin and Biju Dwarakanath

Our Standards:The Thomson Reuters Trust Principles.
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