Metals: Copper Falls as Supply Concerns Diminish

By Katherine Dunn and Biman Mukherji 

Copper prices fell to a one-week low Tuesday on hopes that supply disruptions in Chile and Indonesia could be drawing to a close.

Copper for May delivery settled down 1.8% to $2.6185 a pound on the Comex division of the New York Mercantile Exchange, closing at the lowest level since March 10.

Gold for April delivery settled up 1% to $1,246.50 a troy ounce as the dollar weakened, which makes dollar-priced commodities less expensive for holders of other currencies. The WSJ Dollar Index was recently down 0.5% at 90.08.

Some analysts have pointed to Monday's French presidential debate as undermining gold's appeal as a haven.

"It is possible that the weakness is due to yesterday's TV debate in France, which flash polls suggest was won by the EU-friendly candidate Macron," said Commerzbank in a note. "This is likely to boost his standing as favorite in the presidential elections."

Copper, meanwhile, pulled back as BHP Billiton Ltd., the majority-owner of the Escondida mine in Chile, and union workers are expected to hold talks which could lead to a settlement.

The base metal is also reacting to reports that Freeport-McMoRan Inc's Indonesian unit has resumed production of copper concentrate at its Grasberg mine, after a suspension of more than a month.

The potential for those supply disruptions to end outweighed the weaker dollar and severe flooding in Peru, which may disrupt mining operations and transport. The country is the world's second-largest copper producer.

Copper's downward movement could represent a correction after it rallied in recent months, partly on improving sentiment toward demand in China and hopes that a Trump administration would invest heavily in infrastructure. Copper is still up about 4% since the year began.

The infrastructure spending "is unlikely to be forthcoming either on the scale anticipated nor as quickly as is hoped," Commerzbank said.

Stephanie Yang contributed to this article

Write to Katherine Dunn at [e-mail] and Biman Mukherji at [e-mail]

(END) Dow Jones Newswires

March 21, 2017 14:32 ET (18:32 GMT)

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