Copper Surges On China Growth, Mine Closure

By Katherine Dunn 

Copper prices jumped to the highest in over a year on Friday amid signs of Chinese growth, a strike at the world's largest copper mine and talk of tax cuts in the U.S.

Futures for March delivery were recently up 4.2% at $2.7655 a pound on the Comex division of the New York Mercantile Exchange, trading at the highest level since May 2015. Prices are on track for the biggest one-day gain since September 2015.

"There's lots of things people can take as positive for [copper] for the time being," said Liz Grant at Sucden Financial Limited in London.

Economic data from China released on Friday showed that both total export and import figures for January were far higher than expected. Exports jumped 7.9% in January from a year earlier, while imports rose 16.7% on year, jumping 3.1% from December. China is the world's largest consumer of copper and base metals.

Friday was also the second day of a union strike at the Escondida mine in northern Chile, which is owned by BHP Billiton Ltd. The mine produces roughly 5% of the world's total copper supply. On Friday, the mine said it won't be able to fulfill contracts for copper deliveries or shipments, according to a BHP spokesperson.

"The last couple of days the market's been quite strong on the back of the strike in Chile," said Ms. Grant. Copper is up more than 5% so far this week.

Meanwhile, markets were broadly higher on Friday after comments by President Donald Trump on Thursday that a plan to lower business taxes was "ahead of schedule." Mr. Trump said Congress would receive an outline of the plan by the end of the month.

"There's still a lot of optimism about the pro-growth politics in the U.S.," said Nitesh Shah, commodities strategist at ETF Securities in London. Expectations of those policies, paired with strong Chinese speculative demand, helped the copper market rally sharply late last year.

The details of the policy are still scant, Mr. Shah added, and have to be weighed against the impact of more trade barriers on the market.

"It hasn't sunk in just how damaging protectionism will be," he said.

Stephanie Yang contributed to this article

Write to Katherine Dunn at [e-mail]

(END) Dow Jones Newswires

February 10, 2017 11:06 ET (16:06 GMT)

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