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Copper rose for a second straight session on Monday as fading prospects of an increase to US interest rates and the growing likelihood of mine strikes in Chile outweighed pressure from a strong dollar.
Benchmark three-month copper on the London Metal Exchange was up 1.2% at $14,427 a metric ton as of 16:00 GMT after earlier touching as high as $14,447.50. The metal hit a record $14,875 on September 10 on concerns over tight supplies outside the US before losing ground last week.
“Copper is helped by (an) uptick in equities as US Fed rate hike possibilities in October are dimming,” said Sandeep Daga, head of research at Metal Intelligence Centre.
Odds of an October US rate hike fell after weaker than expected US jobs data last week. Higher interest rates can dampen economic activity and weigh on demand for growth-dependent industrial metals such as copper.
On the supply side, a strike at Antofagasta’s Centinela copper mine could begin on October 13 if no agreement is reached in contract talks, a workers’ union leader said, while supervisors at BHP’s (ASX: BHP) Escondida copper mine, the world’s largest, have also rejected a contract offer.
Traders are awaiting the return of top metals consumer China from a week-long national holiday on Thursday to gauge fourth-quarter buying interest. Chinese copper stocks are thin and smelter maintenance suspensions lined up, but domestic demand also appeared weak, Daga said.
The cash LME copper contract was trading at a premium of nearly $73.50 a ton over the three-month forward, up from $53.50 on Friday, indicating tightening near-term supply.
The entire LME complex moved higher. Aluminium touched its lowest since July 3 before rebounding to trade up 0.9% at $3,130 a ton, and was poised to snap a five-day losing streak.
Zinc climbed 1% to $3,748, lead added 1.3% to $1,875, nickel nudged up by 0.4% to $15,680 and tin gained 0.6% to $54,160.
(Reporting by Tom Daly, additional reporting by Solomon Cefai; Editing by Sonia Cheema, David Goodman and Shailesh Kuber)
