London copper supported by depreciating greenback and supply disruptions

MELBOURNE — London copper edged up Monday, supported by protracted disruptions at the world’s two biggest copper mines and a decline in the recent strength of the dollar.

Indonesia will not back down from new rules requiring Freeport- McMoran to divest a majority stake in its local unit, its Energy and Mineral Resources Minister said late last week in a dispute over rights to the world’s second- biggest copper mine that has frozen exports.

Meanwhile, Chile expects economic activity growth to be hit by around one percentage point in February because of a strike at world no. 1 copper mine Escondida, as copper output slides 12% year on year.

“We expect copper to move into a deficit this year, the key drivers being a dramatically slowing rate of mine supply growth… and a stabilizing demand picture,” Citi said in a report.

“We do think we can see price peaks of close to $7,000 a ton this year.”

London copper rose 0.50% to $5,944 a ton by 0017 GMT, after closing a tad softer in the previous session. Prices have been trading around $5,800-$6,200 a ton for most of the past month, having jumped to a 20-month top at $6,204 on Feb. 13 after disruptions worsened at Escondida.

Shangha i Fut u res Exchange copper edged up 0.30% to 48,210 yuan ($6,992) a ton.

Despite falling mine supply, China exchange inventory trends suggest there is still an overhang of copper stocks.

Shanghai copper stocks jumped in the latest week by 23,974 tons to 313,873 tons, the highest in nearly 11 months.

The dollar declined from recent strength on profit taking, after the Federal Reserve’s longstalled “lift-off ” of interest rates looked to finally get airborne this year as policy makers from Chair Janet Yellen on Friday to regional leaders across the United States signaled that the era of easy money is drawing to a close.

Activity in China’s services sector expanded at the slowest pace in four months in February, with new business still growing at a solid rate but increasing competition making it harder for companies to raise prices, a private survey showed.

Elsewhere, the biggest conference for explorers and developers kicked off in Canada, with some industry experts predicting that recovering mineral and metal prices will further improve the fortunes of small miners.

Speculators cut their bullish position in Comex copper futures and options by 7,851 lots to 70,660 lots, US Commodity Futures Trading Commission data showed on Friday last week. —