SINGAPORE, June 4: London copper climbed for a second session on Tuesday, underpinned by a shutdown at the world’s second biggest copper mine during seasonally strong April-June demand.
Hopes for an extension of the United States’ bond buying programme after weaker-than-expected U.S. Manufacturing data on Monday also underpinned prices.
‘The reason why prices have been well supported is because of the accident at Grasberg – it looks like it will take longer than expected to get back to life,’ said analyst Judy Zhu at Standard Chartered in Singapore.
Freeport McMoRan Copper and Gold Inc’s Grasberg copper mine in Indonesia will not be able to resume output until a probe into a deadly tunnel collapse is completed in about three months, a government official said, adding to worries over metal supplies.
Three-month copper on the London Metal Exchange edged up by 0.18 percent to $7,353.50 a tonne by 0307 GMT from the previous session when it closed up 0.3 percent.
Copper prices climbed by 3.6 percent in May for the first monthly advance since January.
The most-traded September copper contract on the Shanghai Futures Exchange was little changed at 52,980 yuan ($8,600) a tonne.
Despite a rash of middling reports on the global manufacturing sector, Standard Chartered expects demand improvement in the second half after China’s seasonal second-quarter restocking dies down.
‘This is almost the end of the peak season, but that doesn’t mean there will be zero orders for copper in the next 3 months,’ Zhu said.
Manufacturers in the United States, China and Europe struggled last month as demand fell, suggesting an ailing world economy that still needs a steady diet of central bank support.
China accounts for some 40 percent of refined copper demand.
Reflecting solid physical demand for copper, premiums for bonded material in China were quoted in a range of $135-$150 by China information provider Shmet. (http://www.Shmet.Com/)
Adding to support was weak U.S. Manufacturing data that eased worries about the U.S. Federal Reserve’s stimulus programme, although investors were cautious before a more important jobs report later in the week.
($1 = 6.1317 Chinese yuan)
(AGENCIES)
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