Copper pares monthly gain as Freeport can start mining

Underground mining still on hold

Copper fell, paring its first monthly gain in four months as Freeport-McMoRan Copper & Gold Inc. said it can start open-pit production at Indonesia’s Grasberg mine after an accident halted operations.

The metal for delivery in three months on the London Metal Exchange retreated as much as 0.6 percent to $7,276.75 a metric ton and was at $7,311.75 at 10:46 a.m. in Tokyo. The price has risen 3.6 percent this month. Futures for delivery in July on the Comex were little changed at $3.3135 per pound.

Freeport can start open-pit work, though it has yet to receive permission to start underground mining at its Grasberg mine complex, Daisy Primayanti, a spokeswoman for the Phoenix- based miner’s Indonesian unit, said yesterday. Production hasn’t restarted yet at second-largest copper mine, where 28 workers were killed when an underground tunnel collapsed May 14.

“The Freeport news has eased concern over mine supply disruption,” said Tetsu Emori, the chief fund manager at Astmax Asset Management Inc. in Tokyo. While metals were also under downward pressure from the dollar’s strength, a decline in LME stockpiles and improving U.S. economic data would limit further losses, he said.

The Dollar Index, which tracks the currency against those of six major U.S. trade partners, rose for a second day, adding as much as 0.3 percent. It reached 84.498 on May 23, the most since 2010. A rise in the dollar curbs demand from buyers holding other currencies.

U.S. consumer confidence climbed in May to the highest level in more than five years, a Conference Board report showed yesterday. Separate data showed U.S. house prices rose in the 12 months through March by the most in seven years as the recovery in residential real estate gained momentum.

Copper stockpiles monitored by the LME fell for a third day to 619,650 tons. Orders to remove the metal from warehouses climbed 0.5 percent to 223,150 tons, the first gain after three declines from the record on May 21.

The contract for September delivery was little changed at 52,690 yuan ($8,588) a ton on the Shanghai Futures Exchange.

On the LME, zinc and lead declined, while tin climbed. Aluminum and nickel were little changed.

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