Copper, zinc and nickel rebound on supply worries

LONDON — The price of copper bounced back above $6,000 a ton on Monday as a dispute affecting production at the world’s secondbiggest copper mine worsened, while zinc was boosted by a drop in inventories.

Supply issues dominated the base metals market, with nickel also gaining ground to reach a two- month high as the market tracked the latest plans by the Philippines to close mines on environmental grounds.

In copper, US mining giant Freeport-McMoRan, Inc. said on Monday that it could take the Indonesia to arbitration and seek damages over a contractual row that has halted operations at its huge Grasberg mine.

“From a fundamental perspective, it really is supply that’s supporting prices, because we’re not very clear on demand at the moment given the delays to Chinese data,” said Caroline Bain, chief commodities economist at Capital Economics.

Three-month copper on the London Metal Exchange (LME) closed 1.90% higher at $6,070 a ton, recovering from losses on Friday.

Further tightening supplies is a strike at Chile’s Escondida copper mine, the world’s biggest, which has extended into a second week. Both Grasberg and Escondida declared force majeure last week.

“We expect the copper market to move into deficit in 2017 for the first time in six years,” Citi said in a report, adding that copper would hit peaks close to $7,000 before year-end.

LME zinc climbed 2.60% to end open outcry trading at $ 2,884 after LME data showed on-warrant inventories — those not earmarked for shipment from warehouses and therefore available to investors — slid 11% to 258,050 tons, the lowest since January 2009. Zinc has gained 10% this year on concerns that the closure and suspensions of big mines will create shortages.

Nickel extended recent gains, finishing up 0.90% at $11,150, the highest since Dec. 19.

The Philippines’ environment minister said on Monday that she stands by her decision to shut more than half the country’s operating mines ahead of a meeting to review the move.

Aluminum rose 1.10% to end $ 1,900, lead gained 2.60% to close $2,310 and tin rose 0.90% to $19,900. —