LIVE FUTURES REPORT 05/10: LME copper price rises more than 2% but zinc begins to dip

Copper prices on the London Metal Exchange rallied by more than 2% on the afternoon of Thursday October 5 on news of an earthquake in Chile.

The three-month LME copper price closed at $6,700 per tonne, the first time it had done so at this level in almost a month, gaining more than $170 per tonne from the previous closing level.

Prices were supported by news of a 5.4 magnitude earthquake hit the Calama region in Northern Chile. The quake happened around 5am Chile time and did not cause injuries or significant damage to properties, local newspaper El Mercurio de Calama reported.

“The news of the earthquake [in Chile] has filtered through to the market and is boosting the price. It’s in the area of the northern mining regions and it will be interesting to see if anything is disrupted,” one market participant said.

But Chilean copper producers Codelco and Antofagasta reported no damage to their operations. The two miners have works close to the city of Calama, where the earthquake occurred.

“There has been no impact to our operations,” Codelco’s spokeswoman told Metal Bulletin.

Aluminium, lead and tin prices also followed higher while zinc dipped slightly despite the persistent tightness in nearby spreads. Cash/October is at $23 per tonne backwardation and cash/three months is at $65.50b per tonne.

Nickel prices dipped below $10,600 per tonne, reflecting the continued strengthening of the dollar index thanks to stronger US data.

Base metals have experienced little price fluctuation throughout the week, with Chinese market participants sidelined due to an extended national holiday.

Copper prices march higher

  • The three-month copper price closed $179 higher at $6,700 per tonne. Stocks declined by a net 2,450 tonnes to 295,075 tonnes, with 1,600 tonnes freshly cancelled.
  • The global refined copper market recorded a deficit of 70,000 tonnes in June, pushing the supply/demand balance to a deficit of 75,500 tonnes in January-June 2017, the International Copper Study Group estimates.
  • In January-June 2016, the refined market recorded an even larger deficit of 405,000 tonnes.

Base metals prices mostly end in positive territory

  • The three-month aluminium price closed at $2,171.50 per tonne, up $5.50 higher. Stocks declined by 2,350 tonnes to 1,249,350 tonnes.
  • Nickel’s three-month price dipped $80 to end at $10,525 per tonne. Inventories fell 606 tonnes to 387,222 tonnes.
  • The three-month zinc price edged $14 lower at conclude at $3,288 per tonne. Stocks declined by 675 tonnes to 251,075 tonnes.
  • Lead’s three-month price gained $31, closing at $2,592 per tonne. Inventories fell 875 tonnes to 155,525 tonnes.
  • The three-month tin price closed at $20,795 per tonne, an increase of $175. Stocks dipped by 100 tonnes to 19,70 tonnes.

Currency moves and data releases

  • The dollar index was most recently up 0.47% at 93.92.
  • In other commodities, the Brent crude oil spot price was 2.39% higher at $57.06 per barrel.
  • The ADP non-farm employment change in September came in at 135,000, just above an expected 131,000, while the ISM non-manufacturing purchasing managers’ index (PMI) for September stood at 59.8, higher than the forecast of 55.5.
  • In today’s data, weekly unemployment claims came in at 260,000, just below the forecast of 270,000.

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