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| Commodity News |
| HeadLine : |
Copper price surges on South America supply cuts |
| Date : |
Oct 1 2015 |
On Wednesday copper futures staged a comeback from six year lows hit earlier in the week as supply disruptions from top producing countries Chile and Peru lift sentiment in beaten down sector.
On the Comex market in New York copper for delivery in December surged as much as 4.7% to a session high of $2.3575 or $5,200 a tonne. Today's advance lifted the red metal out of bear territory for 2015, but at a more than 17% drop since December 31 following a 16% retreat in 2014, no-one's celebrating a bottom yet.
Today's big jump in heavy volume came after news from top producing country Chile. Output at one of the world's largest copper mines, Collahuasi, will be cut by 30,000 tonnes due to current market conditions.
The mine, owned by Anglo American and Glencore produced 470,000 tonnes of copper in 2014, roughly 2% of global output. Earlier this month Glencore announced it's idling mines in Zambia and the DRC that would remove more than 400,000 from the market.
Also on Tuesday Peru declared a state of emergency in the area around the Las Bambas mine after clashes between police and protesters left four people dead and 16 seriously injured.
Minmetals acquired Las Bambas from Glencore in April last year in a controversial $6 billion deal tied to the Swiss giant's merger with Xstrata
Las Bambas is majority owned by China's Minmetals and the 400,000 tonnes per year mine is set enter production in January next year. Minmetals acquired Las Bambas from Glencore in April last year in a controversial $6 billion deal tied to the Swiss giant's merger with Xstrata.
New mines in Peru coming on stream this year and 2016 would double production to 2.8 million tonnes, placing the Peru in second place globally behind Chile.
Copper's move higher gave a bit of a lift to beaten down copper stocks with Glencore's jumping 14% as it continues to recover from a more than 30% fall in London in Monday. Anglo American shares also also traded up in New York but year to date declines at the diversified miner remain more than 50%.
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