October 22, 2019 / 9:34 AM / 21 days ago

METALS-Copper flat as traders gauge supply concerns from Chile protests

(Updates with official prices)

By Peter Hobson

LONDON, Oct 22 (Reuters) - Copper prices were flat on Tuesday, as traders gauged the impact of intensifying protests in top producer Chile on supplies.

The union of workers at the world’s largest copper mine, BHP’s Escondida, said they would hold a day-long strike on Tuesday in solidarity with protests rocking Chile.

Benchmark copper on the London Metal Exchange (LME) was barely changed at $5,824 a tonne in official rings, after touching a five-week high of $5,868.50 on Monday.

It was too early to say whether shipments or output from Chile would be disrupted, BMO analyst Kash Kamal said.

A mix of tight global supply and weak demand due to the U.S.-China trade dispute means prices are likely to keep bouncing along near current levels, which are around 20% down from last year’s high, he said.

FUNDAMENTALS: The copper market was in a 220,000-tonne deficit in the first six months of the year compared with a 177,000-tonne deficit in the same period in 2018, the International Copper Study Group said.

ANGLO: Anglo American on Tuesday lowered its full-year copper production forecast to 630,000-650,000 tonnes as it grapples with a water shortage in Chile.

STOCKS: On-warrant copper stocks available to the market in LME warehouses rose by 8,950 tonnes to 189,525 tonnes - around average levels in recent years. MCUSTX-TOTAL

Inventories in Shanghai Futures Exchange warehouses at 152,499 tonnes have also risen in recent weeks. CU-STX-SGH

COPPER TECHNICALS: Copper hovered around its technically important 100-day moving average at $5,830.

TRADE WAR: China and the United States have achieved some progress in their trade talks, Chinese Vice Foreign Minister Le Yucheng said on Tuesday.

DOLLAR: The dollar was steady but has weakened sharply since the start of October, supporting metals by making them cheaper for buyers using other currencies.

NICKEL: Benchmark nickel was bid down 0.4% at $16,030 a tonne.

STOCKS: On-warrant stocks in LME-registered warehouses fell by 11,424 tonnes to 29,130 tonnes, the least since September 2007. MNISTX-TOTAL

SPREAD: The premium for cash nickel over the three-month contract fell to $20 from a 12-year high above $200 at the start of October, pointing to increased supply of nearby metal. MNI0-3

LEAD: LME lead touched its highest since July 2018, at $2,227.50 a tonne. In official rings lead was up 0.3% at $2,218.

STOCKS/WARRANTS: Headline stocks in LME warehouses at 69,025 tonnes are close to decade lows and one entity holds between 80% and 89% of warrants. MPBSTX-TOTAL <0#LME-WHL>

SPREAD: The premium for cash lead over three-month metal has risen to $21.50, far above usual levels, suggesting low availability of nearby material. MPB0-3

FUNDAMENTALS: A deficit is feeding lead’s rally, but there are surpluses on the horizon.

OTHER METALS: LME aluminium was down 0.74% at $1,717 a tonne, zinc was flat at $2,475 and tin was unchanged at $16,775.

Reporting by Peter Hobson; additional reporting by Mai Nguyen; Editing by Rashmi Aich and Dale Hudson

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