Copper futures jumped to a three-week high on Wednesday, on concern over a possible disruption in global supplies after an earthquake of 8.2 magnitude in Chile, the biggest producer of the red metal. Meanwhile, gold futures rebounded from a seven-week low, while silver also advanced.
On the Comex division of the New York Mercantile Exchange, copper futures for settlement in May surged by 1.1% to trade at $3.067 a pound by 11:49 GMT. Prices shifted in a daily range between $3.070, the strongest level since March 9, and $3.034 a pound. The metal settled 3.1 percent higher last week, the biggest weekly advance since the 5-day period ended August 9.
A powerful earthquake struck off the coast of Chile at 09:00 p.m. local time on Tuesday, leading to the death of five people. According to data by the US Geological Survey, the earthquake struck about 95 kilometers northwest from the city of Iquique, near the border with Peru, triggering tsunami waves. Iquique is a key copper exporting port, due to his closeness to Chiles main copper mines. However, most of the mining companies already denied suffering major damage to their operations, but the nations emergency services issued a tsunami warning, after which waves as high as 1.8 meters occurred.
Nevertheless, prices remained supported after BHP Billiton Ltd. said it evacuated the Coloso port, which handles ore from the worlds largest copper mine, Escondida.
“The issue from here will be whether or not the tsunami risk materializes and whether shipments are impacted,” Aneek Haq, an analyst at Exane BNP Paribas, said in a note today, cited by Bloomberg.
Copper prices settled the three months through March 10.6% down, the biggest quarterly drop since the second quarter of 2013, on concern economic growth is faltering and default risks are increasing in the world’s largest consumer, China at a time when global supplies are piling.
According to data compiled by the metals researcher CRU, the global surplus of copper may reach 140 000 tons in 2014, almost four times larger than previously estimated as demand in the biggest consumer, China, slows.
Meanwhile, on the Comex division of the New York Mercantile Exchange, gold futures for settlement in June traded at $1 285.00 an ounce by 11.51 GMT, adding 0.4% for the day. Prices shifted in a tight daily range between $1 285.50 an ounce and $1 280.90 an ounce. Yesterday, gold prices touched $1 278.10 an ounce, the weakest level since February 11.
Gold prices drew support amid signs of increasing Chinese demand. On the Shanghai Gold Exchange, trading volumes for spot bullion of 99.99 percent purity rebounded yesterday from the weakest level in two months registered on March 31st and traded at a discount of 17 cents an ounce to the London price.
According to data by the World Gold Council, China overtook India as the largest global consumer of the precious metal last year, consuming a record 1 066 tons.
Elsewhere on the Comex, silver futures for May delivery rose by 1 percent to trade at $19.880 an ounce by 11:52 GMT. The precious metal, has lost 7% in March, registering a second monthly decline since the start of the year. Platinum futures for July delivery rose by 0.14 percent to trade at $1 431.65 an ounce. Palladium futures for June delivery traded at $786.50 an ounce, adding 0.6%. The metal has risen 8% this year on concern more sanctions by the US and the EU on Russia and a strike at South African mines may reduce supplies. The two countries are the biggest producers of palladium.
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