* China industrial production data due Thursday
* Cash over three-month copper contract at 14-month high
(Updates prices)
By Pratima Desai
LONDON, July 13 (Reuters) – Copper prices reached two-year
highs on Monday in a buying frenzy triggered by worries over
strikes and supplies from top producer Chile and flooding in
China.
Benchmark copper on the London Metal Exchange (LME)
was up 2.5% at $6,572 a tonne at 1602 GMT.
Prices of the metal used widely in the power and
construction industries earlier touched $6,633 a tonne, its
highest since June 2018 and up more than 50% since hitting
four-year lows in March.
“Miners at Antofagasta’s Zaldivar mine in Chile voting to
strike provided a tailwind to disruptions at Codelco due to
COVID-19,” said ING analyst Wenyu Yao. “Antofagasta’s Centinela mine will soon conclude voting on
whether to accept a wage offer or go on strike, which is another
upside risk for copper.”
CHILE: Codelco, the world’s largest copper producer, and
other miners in Chile have altered shift patterns, suspended
upgrades and smelter operations in an effort to stop the spread
of the new coronavirus. FLOODING: Traders are worried that flooding in China’s
Jiangxi province could eventually affect copper production. Jiangxi Copper , one of the country’s biggest
copper producers, has so far been largely unaffected by the
floods because most of its transportation is by rail. FUNDS: Much of the buying in base metals markets is by funds
in China and elsewhere, jumping on the uptrend of recent days.
DATA: Clues to demand prospects will come from Chinese urban
investment, house prices and industrial production data on
Thursday.
SPREADS: Worries about supplies on the LME market in the
face of falling stocks and cancelled warrants –
metal earmarked for delivery – pushed cash copper’s premium
over the three-month contract to a 14-month high above $11 a
tonne.
Between May 2019 and June 2020 the cash contract mostly
traded at a discount .
OTHER METALS: Aluminium was up 0.1% at $1,691 a
tonne, zinc gained 2.9% to $2,257, lead rose
1.4% to $1,881, tin climbed 0.4% to $17,380 and nickel added 1.5% to $13,715.
(Reporting by Pratima Desai
Editing by Catherine Evans)
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