Copper Heads for Sixth Weekly Gain on Grasberg Mine Dispute
2007-04-13 07:42
By Chanyaporn Chanjaroen
April 13 (Bloomberg) -- Copper rose, heading for a sixth
consecutive weekly gain on speculation that supply won't meet
demand as workers at Indonesia's Grasberg mine, the world's
second-largest copper mine, plan a protest over wages.
The ``rally'' starting April 18 will last until management
gives written commitments on the workers' demands, said Frans
Pigome, head of Tongoi Papua, the local group behind the action. The
group planned a ``peaceful demonstration,'' said Mindo Pangaribuan,
a spokesman for mine owner Freeport McMoRan Copper & Gold Inc.
``Given Grasberg's status as the largest copper mine in the
region, this could have a massive impact,'' said Gerard Burg, a
metals economist at National Australia Bank Ltd. in Melbourne.
``We could see prices spike up again with this labor dispute.''
Copper for delivery in three months on the LME rose $90, or
1.2 percent, to $7,780 a metric ton as of 12:13 p.m. A close at
that price would mean a gain of 6 percent this week. The contract
advanced 7 percent last week.
Inventories tracked by the LME fell 250 tons to 174,300
tons, the exchange said today in a daily report. That's the fifth
consecutive decline, taking this year's drop to 4.7 percent.
``Supply growth remains muted,'' said Evy Hambro, who helps
manage the world's biggest mining and gold funds at BlackRock
Investment Management, which together have more than $15 billion
under management. Low inventories may spur more gains, he said
today in an interview in London.
China Demand
China's imports of copper and copper products in the first
quarter rose to 776,589 metric tons, up 58 percent from the same
period last year.
China's ``strong'' and ``growing'' demand for metals and
minerals will continue this year, keeping prices for the
commodities at levels ``significantly above the long-term
trend,'' Rio Tinto Plc Chief Executive Officer Leigh Clifford
said today at an annual shareholder meeting in London, in
comments distributed through the Regulatory News Service. Rio is
the world's third-largest miner.
Xstrata Plc, the world's fourth-largest copper producer,
delayed two shipments from its Bajo de la Alumbrera mine in
Argentina after flooding disrupted rail services. Production at
the mine isn't affected, said Claire Divver, a London-based
Xstrata spokeswoman.
Grasberg's labor dispute and Xstrata's shipment disruptions
are ``transitory,'' Nick Moore, an analyst at ABN Amro Holding
NV, said in an interview. He forecasts an oversupply of 250,000
tons in the global copper market this year, mostly to emerge in
the second half. Last year, the market was balanced, he said.
Copper's so-called relative strength index's reading has
stayed above 70 since March 30, signaling a decline. The index,
used by investors and traders to gauge changes in price
direction, registered a reading of 75.79 today.
Nine of 17 people surveyed yesterday and April 11 forecast
copper will drop next week. Six expected an increase and two were
neutral.
Among other contracts traded on the LME, aluminum climbed
$12 to $2,847 a ton, nickel advanced $1,000 to $47,400 and tin
gained $99 to $14,349. Lead rose $25 to $2,005 and zinc increased
$11 to $3,521.
--With reporting by Leony Aurora in Jakarta and Mark Barton and
Brett Foley in London. Editors: Casey (kkl). |
