Already a Bloomberg.com user?
Sign in with the same account.
July 8 (Bloomberg) -- Copper, little changed, may trim a second weekly increase as some investors sold the metal to lock in gains after it rallied to a three-month high on concern supply disruptions may worsen an expected shortage this year.
Three-month copper on the London Metal Exchange fell as much as 0.3 percent to $9,714.25 a metric ton and traded at $9,746.50 by 3:24 p.m. Singapore time. The metal had touched $9,769 earlier today, the highest price since April 12, on reports of adverse weather in Chile’s copper-producing northern region and a strike at the Grasberg mine in Indonesia. It is up 3 percent this week.
The slowdown in demand “has been in a way compensated by a slowdown in production also,” said Diego Hernandez, chief executive officer of Codelco, the world’s largest copper producer. “Some mines have problems with trade unions or climate, or ramp ups of new operations have been slower than expected. Overall the balance has not changed.”
Mines in Chile including BHP Billiton Ltd.’s Escondida, the world’s largest, and American Plc and Xstrata Plc’s Collahuasi have been hit by rain and snow storms this week. The world’s largest copper-producing country put emergency workers on alert yesterday as more than 1,000 people evacuated their homes.
In Indonesia, Freeport-McMoran Copper & Gold Inc. said that production from its Grasberg mine, the world’s second-largest, was disrupted after workers started a seven-day strike on July 4, demanding wage increases. Supply disruptions may exacerbate a shortfall in the metal this year, estimated by the International Copper Study Group to be around 377,000 tons.
Copper for September delivery on the Shanghai Futures Exchange rose as much as 1.8 percent to 72,290 yuan ($11,182) a ton, also the highest price since April 12. Metal on the Comex in New York was little changed at $4.4405 a pound, after gaining 2.5 percent yesterday.
“Fundamentally we’re looking good and the medium-term uptrend remains intact,” Luo Minghui, an analyst at Hongta Futures Co., said from Yunnan. “Tightening in China was one of the more bearish issues for the market and now that it’s done, and that economic data suggests there won’t be further steps in the near term, the market can now focus on the fundamentals.”
China this week raised interest rates for a third time this year, prompting analysts from Goldman Sachs Group Inc. to JPMorgan Chase & Co. to predict the move may be the last for 2011, after China’s manufacturing shrank to the lowest level since February 2009, while services industries expanded at the slowest pace in four months in June.
“The market will be cautious today ahead of the U.S. jobs data,” said Luo. The U.S. unemployment rate likely held at 9.1 percent in June even as payrolls climbed. Employers added 105,000 jobs in June after an advance of 54,000 in the prior month, according to the median estimate of economists in a Bloomberg News survey before today’s Labor Department report.
Aluminum in London dropped 0.4 percent to $2,580 a ton, tin slipped 0.2 percent to $27,490 a ton and zinc declined 0.7 percent to $2,396 a ton. Lead lost 0.3 percent to $2,714 a ton, while nickel gained 0.8 percent to $24,100 a ton.
--Editors: Ovais Subhani, Jarrett Banks
To contact the reporter on this story: Glenys Sim in Singapore at email@example.com
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org