By Eileen Soreng
Dec 6 (Reuters) – London copper prices rose on Monday after a decision by MMG Ltd 1208.HK to shut down production at its Las Bambas mine in Peru exacerbated supply concerns in an already tight market, although the metal’s gains were capped by a firmer dollar.
Three-month copper on the London Metal Exchange CMCU3 rose 0.5% to $9,460 a tonne, as of 0540 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 inched up 0.1% to 69,300 yuan ($10,879.12) a tonne.
MMG said on Friday it would shut down the Las Bambas mine, one of Peru’s largest copper mines, by mid-December because of a road blockade.
Logistics and supply chain bottle necks have led to low copper inventories in some regions, while there might be traders building invisible stockpiles betting on a bullish copper outlook, said CRU analyst He Tianyu.
Copper demand is good in Europe and the United States, but consumption in China is weaker than expected in the traditionally strong season due to high premiums and semi producers cutting down on production to save costs, the analyst said.
Stockpiles of the metal, widely used in power, manufacturing and infrastructure sectors, dropped to a record 169,599 tonnes in Chinese bonded warehouses SMM-CUR-BON last week.
On-warrant LME copper inventories MCUSTX-TOTAL were at 70,275 tonnes, down over 70% from August highs. ShFE stockpiles CU-STX-SGH fell to 36,110 tonnes last week, down 84% from May’s 229,179 tonnes.
Chinese refined copper spot premium SMM-CU-PND surged to a record 2,200 yuan a tonne on Nov. 19 as an issue over value-added tax on imports exacerbated tight supply, but it has eased since then to hit 315 yuan a tonne on Friday.
The dollar index =USD was up 0.1%, making the greenback-denominated commodity more expensive for those holding other currencies. USD/
FUNDAMENTALS
* Speculators cut their net long positions on copper on COMEX 3085692MNET to 13,382 contracts, as of Nov. 30, latest exchange data showed, the lowest since Aug. 24. They boosted short positions 3085692MSHT to 39,240, the highest since June 15.
* LME aluminium CMAL3 fell 0.5% to $2,610 a tonne, zinc CMZN3 dipped 0.5% to $3,146 and nickel CMNI3 edged 0.2% lower to $19,990 a tonne.
* ShFE aluminium SAFcv1 eased 0.1% to 18,775 yuan a tonne, nickel SNIcv1 fell 0.3% to 148,290 yuan a tonne, zinc SZNcv1 fell 1.6% to 22,715 yuan a tonne and lead SPBcv1 was down 2.4% at 14,840 yuan a tonne.
* Federal Reserve policymakers look likely to accelerate the wind-down of their bond-buying programme when they meet later this month, responding to a tightening labour market and moving to open the door to earlier rate hikes than they had projected.
* For the top stories in metals and other news, click
TOP/MTL or MET/L
($1 = 6.3700 Chinese yuan)
(Reporting by Eileen Soreng in Bengaluru and Mai Nguyen in Hanoi; Editing by Devika Syamnath and Subhranshu Sahu)
(([email protected]; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: [email protected]))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com