Copper prices surged to their highest in over 20 months on Friday after BHP Billiton declared force majeure due to a strike at the world's biggest copper mine in Chile. Benchmark copper on the London Metal Exchange surged 4.6 percent to close at $6,090 a tonne, the highest since May 29, 2015. BHP issued an official warning of supply disruptions after workers at the Escondida mine in Chile walked out on Thursday, bringing production to a standstill.
The mine's output for the six months ending December 31 was 452,0000 tonnes, unchanged from a year earlier, BHP said in its latest operational review. It had forecast Escondida would produce 1.07 million tonnes in the 12 months to the end of June.
Uncertainty surrounded the fate of exports from the Grasberg mine in Indonesia, the world's second-biggest copper mine, after government officials said a new mining permit had been issued to Freeport-McMoRan Inc, but the firm said it had not reached an agreement.
Base metals were also broadly supported, with zinc touching a 2-1/2 month high, after US President Trump calmed international tensions by affirming the "one-China" policy and promised big tax cuts. Trade data from China, the world's biggest metals consumer, also bolstered prices.
"There was reasonably good trade data, starting off the year in a more optimistic frame of mind," Robin Bhar, head of metals research at Societe Generale in London, said.
LME zinc climbed 3.3 percent to finish at $2,924, the highest since November 28.
Wall Street hit record highs for a second day and the dollar rose on hopes of business-friendly tax cuts, as upbeat Chinese trade data buoyed commodity-related shares in Asia and Europe. Zinc, mainly used in galvanised steel, was also boosted after Chinese iron ore futures jumped nearly 8 percent on Friday to their highest in three years and Chinese steel rebar futures also gained. Aluminium closed 1.4 percent firmer at $1,875, the highest since January 24, lead gained 2.8 percent at $2,400, and nickel jumped 3.7 percent to end at $10,660, the strongest since December 23. Tin, untraded in closing rings, was bid up 2.1 percent at $19,475.
Comments
Comments are closed.