Copper prices rose on Wednesday as a wave of protests in top producer Chile began to disrupt supplies, but gains were limited by lingering fears over the health of the global economy and the outlook for demand. Benchmark copper on the London Metal Exchange ended up 1.1% at $5,881 a tonne after reaching $5,885, the highest since Sept. 16.
However, the metal used in power and construction remained near last month's two-year low of $5,518. "Weak demand is the overriding story," said ING analyst Wenyu Yao. Antofagasta warned that unrest could lower its output by about 5,000 tonnes, equivalent to less than 3% of third-quarter production.
Codelco, the world's biggest producer, said one of its mines was shut and operations at a smelter drastically reduced. Union workers at BHP's Escondida copper mine downed tools on Tuesday.
The International Copper Study Group said the market would return to a surplus of 281,000 tonnes in 2020 after a 320,000 tonne shortfall this year.
Miner Freeport McMoRan said its copper output fell 14% in the third quarter.
LME zinc finished up 0.1% at $2,469 a tonne, around the highest since July and up from a three-year low of $2,190 on Sept. 3.
On-warrant inventories in LME-registered warehouses fell to 35,125 tonnes, the lowest since at least 1998, and cash zinc traded at a $36 premium to three-month metal, up from around zero over July-September, suggesting lower availability of nearby material.
Speculative positioning in LME zinc was largely flat after a bout of short covering, brokers Marex Spectron said.
The global zinc market saw a 106,000-tonne shortfall over January-July, the International Lead and Zinc Study Group said this month.
LME nickel closed 0.6% higher at $16,590 a tonne, with the premium for cash metal versus the three-month contract tumbling to $30 from more than $200 at the start of October, suggesting shortages of nearby material have eased.
The LME has asked members to report any unusual activity in nickel trading after prices lurched up and down in the wake of large transactions last week, sources said.
Miner Rio Tinto flagged a possible pullback or closure of New Zealand's Aluminium Smelter, citing weakness in the aluminium market and high energy costs.
Tajikistan cut its aluminium output growth target for this year to 5% from 20%, a government source said.
Producer Norsk Hydro said it expected global aluminium demand growth to hover around zero this year, down from 3.1% in 2018. LME aluminium ended up 0.6% at $1,730 a tonne, lead rose 0.3% to $2,224 and tin fell 1.8% to $16,550.
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