Copper up for second day amid firm euro, Peru strike

LONDON copper futures rose for a second straight session on Monday, propped up by a firmer euro and supply disruption concerns following an indefinite workers’ strike at Peru’s top copper miner.

Workers at Freeport-McMoRan’s Cerro Verde in Peru started an indefinite strike on Friday that halted output of about 40,000 tons per month.

“This is positive development for copper after a week- long weakness upon the expectation of (US) rate hikes,” said Helen Lau, analyst at Argonaut Securities.

Three- month copper on the London Metal Exchange (LME) was up 0.50% at $5,761 a ton by 0238 GMT. The metal lost 3.10% last week, the most since December.

The most- traded copper on the Shanghai Futures Exchange gained 1% to 47,000 yuan ($6,808) a ton.

Copper was among a slew of commodities that posted their biggest weekly decline in months last week after recent rallies showed signs of petering out, pressured by a glut and tepid demand from top consumer China. A stronger dollar ahead of a looming US rate increase also weighed.

At BHP Billiton’s Escondida copper mine in Chile, the world’s largest, the striking union said on Saturday it will not accept the firm’s offer to return to the negotiating table, and asked BHP to clarify its negotiating positions.

BMI Research, a unit of Fitch Ratings, raised its 2017 copper price forecast to $ 5,500 from $5,150 on solid Chinese demand growth and supply disruption concerns. “Over a multi-year horizon, we expect copper prices to gradually improve, however highlight downside pressure on prices in 2018 from fading Chinese fiscal spending,” BMI said in a note.

The stronger euro against the US dollar also aided copper and other commodities, making dollar-denominated assets cheaper for holders of other currencies.

The euro edged up near a onemonth high against the greenback after some European Central Bank policy makers raised the possibility of hiking interest rates before bond purchases end.

LME zinc rose 1.20% to $2,736 a ton and zinc in Shanghai climbed 2.20% to 22,310 yuan a ton. LME aluminum was steady at $1,882 per ton and so was Shanghai aluminum at 13,790 yuan. —