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Copper gains despite supply concerns and a stronger dollar

After a day of losses, copper prices have risen slightly as supply disruptions are credited with easing the pressure caused by a higher dollar.

The London Metal Exchange reported that the price of three-month copper was $10,768 per ton at 0713 GMT. This is a 0.1% increase.

The dollar index continued to rise, reaching a new high of more than one month against its competitors. A firmer dollar makes greenback-denominated assets, like copper, more expensive for holders of other currencies.

Seven workers were killed in a mudslide disaster at Indonesia's Grasberg copper mine, the second largest mine in the world and responsible for 3% global concentrate production. The mine's operations have been halted since nearly a week.

Supply concerns will likely persist in this year, given the suspension of mining at Grasberg and disruptions caused by an earthquake at the Kamoa Kakula mine in Democratic Republic of Congo, as well as an accident at the El Teniente Mine in Chile in July.

Analysts at ANZ stated that "the recent supply-side disruptions continue to be a positive factor for copper price."

Freeport, the operator of Grasberg, did not say when operations will be back to normal. ANZ says that disruptions in Chile and this are helping copper.

After the Codelco mine accident on July 31, Chile's production fell by 9.9% in August.

Chile, the largest copper producer in the world, exported $4.39 Billion worth of metal to the United States last month, a drop of 2.03% compared to the same period a year ago, according the central bank.

Other London metals included aluminium at $2,740 per ton, while nickel dropped 0.4% at $15,425, and lead fell by 0.3% at $2,004.5. Zinc was down 0.4% at $3,033, with tin at $36,455.

Golden Week, which runs from 1-8 October, is a time when Chinese markets will be closed.

Click here to see the latest news in metals, or click here (Reporting and editing by Sumana Nandy in Bengaluru and Subhranshu sahu in Harikrishnan Nair).

(source: Reuters)