Mine strike and protests help propel copper to two-month peak

The Las Bambas mine in Peru

The Las Bambas mine in Peru

20th November 2023

By: Reuters


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LONDON - Copper prices jumped to two-month highs on Monday, boosted by protests at a mine in Panama, a strike at a mine in Peru, growing hopes of fresh stimulus in China and a falling dollar.

Traders said supply concerns come from reduced ore processing owing to protests at First Quantum Minerals' Cobre Panama mine, which sources said the company was considering putting on care and maintenance from November 23. Cobre Panama accounts for 1% of global copper output.

Also in focus was a strike at the Las Bambas copper mine in Peru owned by China's MMG.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 2% at $8,435 a metric ton by 17:02 GMT, having earlier touched $8,439 for its highest since Sept. 18.

Hopes for stronger copper consumption were raised by a pledge from China's central bank to ensure financing support for the property sector, a major consumer of industrial metals.

"For me, copper demand looks strong in China, primarily in the green sectors. We know utilisation rates at wire rod plants picked up into mid-November," said Dan Smith, head of research at Amalgamated Metal Trading.

Sliding stocks of copper in warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH suggest healthy China demand, traders said. At 31 026 metric tons, they have dropped 90% since February.

A weaker U.S. currency, meanwhile, makes dollar-priced metals cheaper for holders of other currencies.

Elsewhere, lead CMPB3 hit its highest since Jan. 9 at $2,308.50 a ton as funds and traders raised bets on higher prices of the battery material as the market moves into a seasonally strong consumption period.

Stocks of lead in LME-registered warehouses are up, but cancelled warrants - metal earmarked for delivery - have jumped recently to 44% of the total at 135,925 tons, suggesting that 59 400 tons are due to leave the LME system.

In other metals, aluminium gained 1.6% to $2,243 a ton, zinc CMZN3 added 0.7% to $2,574, lead retreated 0.7% to $2,278, tin CMSN3 advanced 0.3% to $24,930 and nickel CMNI3 climbed 0.3% to $16,960.

Edited by Reuters




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