Copper prices rebounded on Friday as production disruptions in Peru, the world’s second-largest copper producer, sparked fresh concerns over supply of the metal against thin inventories.
Three-month copper on the London Metal Exchange CMCU3 was up 0.5% at $7,597 a tonne, as of 0221 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange SCFcv1 held its ground at 63,390 yuan ($8,681.18) a tonne.
This reversed a decline from the previous session where prices of copper, often used as an economic indicator, sagged after the U.S. Federal Reserve failed to provide a clear signal for less-aggressive hikes to interest rates as a global slowdown curbs demand for metals.
The huge Las Bambas copper mine in Peru, owned by Chinese miner MMG Ltd 1208.HK, has started to reduce operations due to recent blockades, the mine said in a statement on Thursday. Las Bambas, whose operations have often been disrupted by protests from neighboring indigenous communities, accounts for 2% of global copper supply.
MMG Ltd in August lowered its forecast for annual copper production at Las Bambas to 240,000 tonnes. Total copper production in Chile, the world’s biggest producer, fell 4.27% in September to 428,300 tonnes, according to the government body Cochilco. This came against the backdrop of low inventories in the market.
Copper stocks in LME warehouse dropped 8,250 tonnes on Thursday. Among other metals, SHFE aluminium SAFcv1 gained 0.6% to 18,130 yuan a tonne, zinc SZNcv1 was up 1.3% at 23,115 yuan a tonne, while nickel SNIcv1 lost 0.8% to 191,100 yuan a tonne. LME aluminium CMAL3 added 0.2% to $2,268 a tonne, tin CMSN3 increased 0.2% to $17,800 a tonne and zinc CMZN3 rose 0.7% to $2,738.50 a tonne.