Copper prices stabilize as supply shortage concerns recede

Copper prices were steady on Monday as Chile allowed mining operations to resume at Codelco’s El Teniente mine, while the market awaited further signals on the path of interest rates.

Benchmark three-month copper on the London Metal Exchange slipped 0.1% to $9,756 per metric ton by 09:34 GMT, after gaining 1.4% last week.

Easing supply concerns, Codelco said on Saturday that Chilean government regulators had approved the reopening of parts of El Teniente unaffected by the July 31 collapse, which killed six workers.

On the consumption side, data showed China’s producer prices fell more than expected in July, while consumer prices were unchanged, reflecting weak domestic demand.

Investors hope demand from China, the world’s largest metals consumer, will improve in September — typically the peak season — and that Beijing and Washington will extend the deadline for reaching a trade agreement once again.

A trader noted that the metals market was relatively calm ahead of the release of US inflation data this week, which could determine whether the Federal Reserve cuts borrowing costs next month, as lower interest rates boost the economic growth outlook for industrial metals tied to economic activity.

Technically, copper found support at its 21- and 50-day moving averages, in the $9,735–$9,740 range.

Among other LME metals, zinc was steady at $2,825 a ton. However, the price spread between the spot zinc contract and the three-month contract narrowed to 20 cents from $13 on August 15, as available warehouse stocks approved by the exchange fell to a two-year low.

Aluminum fell 0.5% to $2,596.50 a ton, lead slipped 0.3% to $2,001.50, tin was unchanged at $33,450, and nickel rose 0.7% to $15,260.

Meanwhile, the US dollar index rose 0.4% to 98.6 by 15:57 GMT, with a high of 99.3 and a low of 98.03.

In US trading, September copper futures fell 0.1% to $4.46 per pound by 15:53 GMT.