Supply disruptions, weak dollar support copper

JOHANNESBURG — Copper closed above the psychologically important $6,000 level again on Monday as the dollar hovered near 13-month lows and mine disruptions fueled concerns about falling supply.

Benchmark copper on the London Metal Exchange closed 0.40% higher at $6,027 tons. On Friday it had briefly touched $6,051, its highest since March 1.

“Copper is testing that $6,000 level again today but technically the uptrend is still intact,” said Sucden Financial analyst Kash Kamal, adding that the “outlook across the base metals complex is encouraging.”

Union- represented workers and management at Antofagasta’s Zaldivar copper mine in Chile failed to reach a wage deal last week and they agreed to extend government-mediated talks into this week.

Disruptions to copper shipments from Canada and Chile have undermined expectations for rising global copper supplies in the second half of the year, cutting the fees that smelters charge miners to process metal.

Capital Economics analyst Caroline Bain said that the impact from mine disruptions could be minimal as copper inventories were still high, indicating that the market was well supplied.

The US dollar labored at a 13- month low against a basket of currencies, making dollar-denominated commodities cheaper for holders of other currencies and potentially boosting demand.

Data on Monday showed imports of copper fell 11% in June year on year to 1,444 tons.

An estimated 5,000 workers at the giant Grasberg copper mine operated by Freeport-McMoRan, Inc.’s Indonesian unit will extend their strike for a fourth month in a dispute over layoffs and employment terms.

Hedge funds and money managers increased their net long position in copper by 7,706 lots to 74,233 lots, the highest since February.

Supporting nickel, Philippine President Rodrigo R. Duterte said on Friday the government would draft a new law for the country’s mining industry, which he said pays too little in tax and not enough to compensate for environmental damage. The country is a major supplier of nickel ore.

Indonesia exported 403,201 tons of nickel ore in the first six months of 2017 when a complete ban on exports was lifted.

Nickel closed 2.80% higher at $9,758 tons. Aluminum fell 0.20% to $1,912 a ton; zinc rose 1.30% to $2,788 a ton; lead added 1% to $2,260 and tin slipped 0.40% to $20,155 a ton. —