You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Copper rises with industrial metals as supply risks buoy rally

Copper rose as much as 1.5% to $10 525 a metric ton on the London Metal Exchange before trading at $10 485 at 8:30 a.m. in London.
Image: Bloomberg

Copper rose toward a record as the potential for tighter regulation and higher taxes in Chile fuel concerns about the long-term supply outlook. Zinc jumped amid speculation about disruptions to Chinese output.

The world’s biggest copper producer just elected an assembly that places the writing of a new constitution largely in the hands of the left wing. The makeup is likely to leave miners facing tougher rules around the environment and mineral rights, and could add momentum to a bill that would create one of the heaviest tax burdens in the global industry. In Peru, the leading presidential candidate wants to impose a tax on copper sales.

That’s adding to concerns about tight supply at the same time demand surges. More immediately, the threat of labour disruptions continues to hang over the market after BHP Group requested a mediation process to avert a strike at a remote operations center in Santiago that serves Escondida and Spence copper mines.

Copper had stumbled with other industrial materials after climbing to a record last week as China stepped up efforts to cool the commodities surge that’s fanning fears of global inflation. Citigroup Inc. recommended buying on the dips as Beijing could “easily run out of options” to contain costs without making a U-turn in the ongoing domestic production crackdowns for environmental, energy and safety control purposes.

“We do not foresee such a U-turn any time soon given the strategic priority of these agendas,” analysts including Tracy Liao, wrote in a note. The country’s measures to rein in prices appear “temporary,” with a potential exhaustion of policy options likely resulting in another round of commodity price rallies, fueled by solid end-use global demand and continued domestic supply curbs in some commodities, they wrote.

Zinc surged to the highest since 2018 amid speculation that smelters in China’s Yunnan province are reducing output due to a power shortage, according to Li Wenchang, an analyst with researcher Mysteel. Major smelters were asked to cut power consumption by 10%, which may lead to about 10% of refined zinc capacity being cut, according to estimate from Beijing Antaike Information Development Co.

Yunnan’s monthly refined zinc output was about 75 000 tons, according to Antaike. China’s monthly output is around 600 000 tons. The Yunnan provincial development and reform commission didn’t immediately respond to a fax seeking comment.

Copper rose as much as 1.5% to $10 525 a metric ton on the London Metal Exchange before trading at $10 485 at 8:30 a.m. in London. Zinc gained as much as 3.1% to $3 108.50 and nickel surged 1.7%.

© 2021 Bloomberg

COMMENTS   0

You must be signed in to comment.

SIGN IN SIGN UP

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

SEARCH COMPANIES
Enter company name or share code:

ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products May 2021 4.40%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing May 2021 5.00%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. Jun 2021 3.50%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) Jun 2021 7.00%
INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles: Advanced Search
Click a Company: