Copper Gains on Weak Dollar, Supply Worries

By Katherine Dunn 

LONDON--Copper prices rose Friday on the back of a weaker dollar and ongoing supply concerns at mines in Indonesia and Chile.

The London Metal Exchange's three-month copper price rose 0.75% to $5,896 per metric ton in midmorning European trade, erasing some of the previous day's decline.

A union strike at the Escondida mine in Chile, the world's largest copper mine, is now in its third week. The mine is majority-owned by BHP Billiton Ltd. and produces roughly 5% of the world's supply. In Indonesia, Freeport-McMoRan Inc. and the Indonesian government have yet to reach an agreement on the terms of an export license for the Grasberg copper mine, also one of the world's largest.

On Friday, Indonesia's president said he is prepared to take a "firm stance" with the company if an agreement can't be reached. Earlier this week, Freeport's chief executive said that it would consider arbitration if the dispute wasn't resolved in 120 days.

A slightly weaker dollar was also helping industrial metals. The WSJ Dollar Index was down 0.06% on Friday.

Meanwhile, questions remain about the details of the Trump administration's promises to boost infrastructure spending, which helped stoke the rally in base metals markets since late last year. However, the impact of even a significant boost is likely to be minimal on the world market, said Carsten Menke, a commodities analyst at Julius Baer.

"For copper, we continue to believe that any impact from infrastructure spending on demand should be small as less than a third of U.S. copper demand is infrastructure-related," Mr. Menke said in a morning note. "That said, sentiment in the copper market remains very bullish," helped by supply disruptions in Chile and Indonesia.

The other base metals were higher on Friday. Aluminum was up 0.75% at $1,879.50 per metric ton, lead was up 0.92% at $2,254 per ton, zinc was up 1.38% at $2,820 per ton, nickel was up 1.56% at $19,150 per ton, and tin was up 1.46% at $19,150 per ton.

Sara Schonhardt contributed to this article.

Write to Katherine Dunn at [e-mail]

(END) Dow Jones Newswires

February 24, 2017 06:25 ET (11:25 GMT)

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