Oops used wrong color font for title of article from a couple days ago before Force Majeure at Grasberg.
Copper Gains Most in a Week on Supply Concern as Nickel Declines
Copper rose the most in a week in London amid supply concern as the world’s second-biggest copper mine in Indonesia remains shut after a deadly accident. Nickel sank to the lowest level since July 2009.
Freeport-McMoRan Copper & Gold Inc. (FCX) rescheduled concentrate shipments to its customers and is yet to declare a force majeure, President Director Rozik B. Soetjipto said today. Copper buyers in the U.S. and Europe are paying a higher premium than last month amid limited availability of the metal. The metal also gained as some traders bought after prices slid to a five-week low yesterday, according to Citigroup Inc.
“The potential output cuts at Freeport’s Grasberg appear to be giving some support as concerns over supply continue,” Cailey Barker, an analyst at Numis Securities Ltd. in London, said in a report.
Metal for delivery in three months rose 1.1 percent to $7,144.75 a metric ton by 10:26 a.m. on the London Metal Exchange. Copper jumped as much as 1.4 percent, the biggest intraday gain since June 4, after dropping to as low as $7,032 yesterday. Futures for delivery in July rose 0.9 percent to $3.223 a pound on the Comex in New York.
“Everybody has been saying as soon as it gets to $7,000 it looks like it’s worth buying, and if it’s at $7,500 or close to, it’s worth selling,” David Wilson, a London-based analyst at Citigroup, said by telephone today.
Operations at Grasberg are shut, except for maintenance, until the government gets the results of an independent probe of an accident at a tunnel that killed 28 people on May 14, the Energy and Mineral Resources Ministry said June 5. Another worker died on June 1 after a separate incident. The halt may cut output by about 680 tons a day, Bloomberg calculations show. Force majeure is a legal clause allowing companies to miss deliveries because of circumstances beyond their control.
“The market continues to be tight with relatively low levels of visible stocks and a supply side that is affected by disruptions at existing operations and delays to new production coming on-stream,” Antofagasta Plc Chairman Jean-Paul Luksic said in a statement today, adding the company remains positive on the long-term fundamentals of the copper industry.
Copper stockpiles monitored by the LME rose 0.1 percent to 609,550 tons as orders to remove the metal from warehouses slid 0.4 percent to 223,100 tons, daily exchange figures showed.
Nickel sank to the lowest since July 2009, retreating for a sixth day, before trading at $14,470 a ton. Nickel stockpiles monitored by the LME rose to a record 183,720 tons on inflows in Johor, Malaysia, the data showed.
Aluminum, lead and zinc gained on the LME. Tin fell. The Shanghai Futures Exchange is closed today for the Dragon Boat Festival holiday.
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