LONDON: Copper prices touched a four-week high on Tuesday as a fall in output from top producer Chile and pressure for more sanctions on Russia, another large producer, raised supply risks.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $10,445 a tonne in official trading after reaching $10,580, near last month’s record high of $10,845.
The metal used in power and construction is up around 7% this year after rising around 25% in 2020 and 2021.
“Chilean copper production was incredibly low in February,” said Commerzbank analyst Daniel Briesemann, while noting a rise in the fees smelters are charging to refine ore suggests supply is still reasonably abundant.
LME copper dips as dollar firms; volumes thin on China holiday
Prices should remain high or rise further, before falling towards year end, Briesemann said.
Chile: Chile’s copper production fell by 7.5% in February to 394,700 tonnes, the government said.
Charges: China’s top copper smelters raised their floor treatment and refining charges (TC/RCs) for copper concentrate in the second quarter by 14%, sources said last week.
Sanctions: The European Commission will propose sweeping new sanctions against Russia, including banning imports of coal, wood, chemicals and other products worth about 9 billion euros ($9.86 billion) a year, an EU source said.
Industrial metals are not subject to sanctions. Russia produced about 3.5% of the world’s refined copper last year.
Zinc: On-warrant inventories of zinc in LME-registered warehouses fell to 64,025 tonnes from 130,000 tonnes in mid-March, highlighting fears of tight supply.
Some smelters in Europe have been forced by high power prices to cut production. LME zinc was down 2.3% at $4,269 a tonne but is up around 20% this year having reached a record high in March.
Outbreak: Authorities in China, the biggest metals consumer, extended a lockdown in Shanghai to cover 26 million people. The COVID-19 outbreak has disrupted some industries but many traders expect government stimulus to support growth.
Nickel: Global nickel smelting activity climbed in March, data from satellite surveillance showed.
Prices: LME aluminium was down 0.2% at $3,440 a tonne, nickel rose 1.4% to $33,725, lead fell 0.3% to $2,406 and tin was up 0.7% at $44,475.