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Copper prices lifted by hopes of rate cuts and Chilean supply concerns

The copper price edged up on Wednesday due to the expectation of rate cuts in the United States and ongoing supply concerns after a mine was suspended in Chile, a top copper producer.

The price of three-month copper at the London Metal Exchange rose 0.4% to $9,677 a metric tonne by 0930 GMT. It had fallen 0.6% the previous session.

Metals are gaining this morning as the dollar weakens and Fed rate cut bets increase, according to EwaManthey, commodities analyst at ING.

After the weak U.S. employment data released on Friday, traders have priced in an 86.5% probability of a Fed rate reduction in September. By year's end, traders expect a 56 basis point easing.

Investors also keep an eye on developments in Chile, which is the largest copper producer in the world, following the collapse of its El Teniente mine, where six people were killed due to a recent tremor.

Codelco, a miner that produced 356,000 tonnes of copper in the past year, must submit four reports to restart underground operations.

"It's been a mixed bag." The copper price has held up well this week. The Codelco story was a micro-story that supported the prices," said Yuting Du, research analyst at Marex.

Du said that some investors also bet on lower prices by using puts in the options market.

The Shanghai Futures Exchange's most traded copper contract fell 0.3%, to 78.280 yuan (10,889.01 dollars) per ton.

The market also benefited from the hope that the U.S. and China trade war would ease after President Donald Trump announced they were close to reaching a deal with China, which is the world's largest metals consumer.

Other metals include LME aluminium, which rose by 0.6%, to $2.577 per ton. Zinc also rose, up 0.5%, to $2.773, while nickel grew 0.6%, to $15.120. Lead gained 1%, to $1.993.50, and tin increased 0.7%, to $33,485.

Click or to see the top news stories about metals, and other topics. ($1 = 7.1889 Chinese Yuan) (Reporting is by Eric Onstad. Editing by Ronojoy Mazumdar).

(source: Reuters)