Copper Gains on Weak Dollar, Supply Worries
February 24 2017 - 6:40AM
Dow Jones News
By Katherine Dunn
LONDON--Copper prices rose Friday on the back of a weaker dollar
and ongoing supply concerns at mines in Indonesia and Chile.
The London Metal Exchange's three-month copper price rose 0.75%
to $5,896 per metric ton in midmorning European trade, erasing some
of the previous day's decline.
A union strike at the Escondida mine in Chile, the world's
largest copper mine, is now in its third week. The mine is
majority-owned by BHP Billiton Ltd. and produces roughly 5% of the
world's supply. In Indonesia, Freeport-McMoRan Inc. and the
Indonesian government have yet to reach an agreement on the terms
of an export license for the Grasberg copper mine, also one of the
world's largest.
On Friday, Indonesia's president said he is prepared to take a
"firm stance" with the company if an agreement can't be reached.
Earlier this week, Freeport's chief executive said that it would
consider arbitration if the dispute wasn't resolved in 120
days.
A slightly weaker dollar was also helping industrial metals. The
WSJ Dollar Index was down 0.06% on Friday.
Meanwhile, questions remain about the details of the Trump
administration's promises to boost infrastructure spending, which
helped stoke the rally in base metals markets since late last year.
However, the impact of even a significant boost is likely to be
minimal on the world market, said Carsten Menke, a commodities
analyst at Julius Baer.
"For copper, we continue to believe that any impact from
infrastructure spending on demand should be small as less than a
third of U.S. copper demand is infrastructure-related," Mr. Menke
said in a morning note. "That said, sentiment in the copper market
remains very bullish," helped by supply disruptions in Chile and
Indonesia.
The other base metals were higher on Friday. Aluminum was up
0.75% at $1,879.50 per metric ton, lead was up 0.92% at $2,254 per
ton, zinc was up 1.38% at $2,820 per ton, nickel was up 1.56% at
$19,150 per ton, and tin was up 1.46% at $19,150 per ton.
Sara Schonhardt contributed to this article.
Write to Katherine Dunn at Katherine.Dunn@wsj.com
(END) Dow Jones Newswires
February 24, 2017 06:25 ET (11:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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