Copper rose on the London Metal Exchange, the only gain among the six main metals traded on the bourse, as traders closed out bets on lower prices amid concern about supply.
Interruptions to output in recent months are affecting physical supply of copper, according to Societe Generale SA. Speculators are likely positioned “very short on the LME,” Standard Bank Group Ltd. said yesterday, referring to bets on a decline. Prices reached the lowest level since 2010 last week.
“There is an impression that the market is a bit short copper, so you have a little bit of a squeeze,” Jesper Dannesboe, a senior commodity strategist at Societe Generale in London, said by phone. He cited “the supply disruptions that hit the headlines several months ago,” as well as “some short- covering.”
Copper for delivery in three months climbed 0.5 percent to $6,946 a metric ton by 10:55 a.m. on the LME. Metal for immediate delivery was at a $1.50-a-ton premium to the three- month contract, narrowing from as much as $18 yesterday, the widest backwardation in a year. Copper for delivery in September rose 0.2 percent to $3.149 a pound on the Comex in New York.
Freeport-McMoRan Copper & Gold Inc. is awaiting approval to restart underground mining at Grasberg in Indonesia, the world’s second-biggest copper mine, after a deadly accident in May. A landslide in April reduced production at Rio Tinto Group’s Bingham Canyon mine in Utah. Factory orders in the U.S. rose more than estimated in May, a report showed yesterday.
“Evidently, some market players have squared short positions in the wake of better economic data of late, pessimism among speculative financial investors having hit an 11-week high at the beginning of last week,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a report today.
China’s State Reserve Bureau was buying aluminium, Goldman Sachs Group Inc. said in a report yesterday. Speculation that the stockpiling agency was buying copper supported the market, according to James Marks, a co-head of global metals at Xconnect Trading Ltd., a London-based interdealer broker.
Aluminum, nickel, tin, lead and zinc fell in London. Comex floor trading will be closed tomorrow for Independence Day.
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