Copper Rises on Supply Disruptions and Weak Dollar

Copper futures were higher in London on Monday, as supply disruptions in Chile and the United States interest rate decision continued to boost the price of the industrial metal.

Three-month copper on the LME hit an intraday low of $5,013.50 per tonne, the weakest since August 27, before paring losses to close down 0.1 percent at $5,051.

“After the Fed inaction (on rates) the market is a bit confused about the next step”.

“Copper prices [are] rising this morning as…some key copper mines paused production last week to give time for engineers to check their operations”, said SP Angel, a brokerage, in a research note.

Copper is traded in dollars and becomes less expensive for investors who use other currencies to fund their metals purchases.

“While this growth has now slowed to around 7 percent, China will always be important to us due to its sheer volume of demand for copper”, she said.

Copper and other metals have suffered from a slowing Chinese economy and a shift in growth towards sectors that require less commodity imports.

“We expect renewed demand out of China to lift prices further following the restart of industry following the WWII parades two weeks ago”, said SP Angel. “But most cuts were meeting resistance from local governments which delayed or eliminated closure plans”, Paul Adkins of consultancy AZ China told the Reuters Global Base Metals Forum.

The most actively traded contract, for December delivery, was recently up 0.95 cent, or 0.4%, at $2.3050 a pound on the Comex division of the New York Mercantile Exchange.