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Copper pares rise as Chilean mining relatively unscathed|Copper crusher

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Copper pares rise as Chilean mining relatively unscathed|Copper crusher

June 11, 2023 nflg 0 Comments

Copper pares rise as Chilean mining relatively unscathed

NEW YORK (MarketWatch) — Copper futures climbed the most in nearly a year Monday before scaling back on thinking the deadly earthquake in Chile, where much of the world’s copper is mined, would not cause major disruptions in supply.

“The mining sector, situated mostly in the northern part of the country, seems to have emerged relatively unscathed, except for some power outages,” said Daniel Kerner, Latin America analyst at the Eurasia Group

“There were reports that the country’s main mines were back in operation,” Kerner added.

The 8.8 magnitude quake hit during the weekend, killing more than 700 people.

Paring an earlier gain of more than 6%, copper futures for May delivery added 7 cents, or 2.1%, to end at $3.35 a pound on the New York Mercantile Exchange. The contract had hit an intraday high of $3.49 a pound.

Shares of Freeport-McMoRan Copper & Gold Inc. /quotes/comstock/13*!fcx/quotes/nls/fcx (FCX 76.27, -0.18, -0.24%) , the world’s second-biggest copper producer after Chile’s Codelco, traded up 1.6%; shares of Newmont Mining Corp. /quotes/comstock/13*!nem/quotes/nls/nem (NEM 50.21, -0.07, -0.14%) gained 1.8%.

The rise in copper on the first day of March comes on the heels of February’s 7.1% rise, the strongest monthly gain for the active copper contract since August 2009, noted Dan Greenhaus of Miller Tabak & Co.

Those gains followed an 8.7% drop in January, the first down month for copper since December 2008, he added.

The Chilean quake cut power and reportedly halted production at mines run by state-owned Codelco.

Global miner Anglo American /quotes/comstock/23s!e:aal (UK:AAL 2,450, +60.00, +2.51%) said in a statement Monday that power has been partially restored at four sites impacted by the quake, “with teams working to return to full and safe production as soon as it is able.”

Noting that Chile produces one-third of the world’s supplies of copper, Ole Hansen, head of the listed products team at Saxo Bank in London, said that most of the country’s largest mines are in the north of the country, away from quake-disrupted areas.

“However, damage to the infrastructure, especially the supply of electricity, will near term have the greatest impact,” the analyst wrote.

Monday’s earlier price spike in copper was overdone, considering that global inventories are at multiyear highs and that “a short-term output disruption can be absorbed,” wrote Commerzbank analyst Carsten Fritsch.

Up and down during the session, gold futures for April delivery finished little changed, dropping 50 cents to end at $1.118.30 an ounce.

The earthquake didn’t lift the price of gold, “which is still blowing hold and cold in line with the dollar and the general level of risk appetite,” Hansen wrote.

Kate Gibson is a reporter for MarketWatch, based in New York.

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