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BASE METALS: Copper Edges Higher On Hopes Of EU Debt Progress
Sep 19,2011 10:04CST
industry news
Source:SMM
Copper prices inched higher on hopes that a European finance ministers' meeting would tackle the region's debt crisis and a renewed focus on copper production disruptions.

Sep 16, 2011 NEW YORK (Dow Jones)--Copper prices inched higher on hopes that a European finance ministers' meeting would tackle the region's debt crisis and a renewed focus on copper production disruptions.

The most actively traded contract, for December delivery, was recently up 2.70 cents, or 0.7%, at $3.9840 a pound on the Comex division of the New York Mercantile Exchange.

Thinly traded September-delivery copper was up 2.65 cents, or 0.7%, at $3.9715 a pound.

Euro-zone finance ministers met Friday for two days of talks in Poland in a bid to calm anxiety over the spread of sovereign debt problems in the region. Copper prices edged higher on hopes that the meeting would engender some decisive action among the group.

Investors have long been worried that euro-member Greece will default on its debts and trigger a financial crisis on par with the devastation that followed the bankruptcy of Lehman Brothers in 2008.

Copper prices first caught a boost Thursday after days of downward pressure after the European Central Bank engineered a liquidity injection into the region's banking system. The ECB acted in concert with major central banks around the world to make dollars more easily available to European banks and prevent a liquidity crunch that could arrest business activity in the region.

Copper is widely used across manufacturing and construction, and demand for the metal tends to wane when the economy stalls.

Mining operations in Zambia were back on track Friday after a power outage in the main copper mining province disrupted work at several mines. The outage mainly affected the Copperbelt province, home to Vedanta Resources PLC's Konkola Copper Mines, Glencore International's Mopani Copper Mines and Chinese-owned Chambishi Copper Mines.

Meanwhile, operations at Freeport McMoRan Copper & Gold Inc's Grasberg mine in Indonesia remain suspended due to a unionized worker strike that began Thursday. The union is seeking higher wages.

Disruptions to copper mine supply have been a key driver behind higher copper prices this year, said analysts at metals consultancy VM Group. Recent strikes in top copper producer Chile, as well mines in Peru and Indonesia have made a significant dent in global copper output, they said.

"The International Copper Study Group's estimated 1.6% growth in copper mine supply in the first five months of 2011 looks unlikely to be repeated over the rest of the year," VM Group said.

 

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