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Copper steadies below 20-month peak as supply concerns linger

Investing.com -

Investing.com - Copper futures held steady near the strongest level since May 2015 on Tuesday, amid concerns over a disruption to global supplies after strikes at BHP Billiton (LON:BLT)'s Chilean Escondida and Freeport-McMoran(NYSE:FCX)'s Indonesian Grasberg mine.

Combined, the mines produce roughly 10% of the world's total copper supply.

Copper for March delivery on the Comex division of the New York Mercantile Exchange dipped 0.2 cents, or around 0.1%, to trade at $2.781 a pound by 8:20AM ET (13:20GMT), after rising 1.5 cents, or about 0.6%, a day earlier.

Nymex copper rallied to $2.823 on Monday, the most in 20 months.

Meanwhile, three-month copper on the London Metal Exchange shed 0.2% to $6,113.25 a metric ton after rising to $6.202.25 in the prior session.

Workers at the Escondida mine in northern Chile have been on strike since last Thursday after talks between management and workers broke down.

The workers union has warned that the strike could be lengthy, potentially affecting global supplies.

The mine, which is owned by BHP Billiton, produces roughly 5% of the world's total copper supply.

Prices received additional support after Freeport-McMoRan said that an export ban remains in place at its Grasberg mine in Indonesia, the world's second biggest, because it has not yet reached agreement with the government on a new mining permit.

That comes against a backdrop of encouraging demand signals from China, which posted much stronger-than-expected trade data for January as demand picked up at home and abroad.

The Asian nation is the world's largest copper consumer, accounting for nearly 45% of world consumption.

Elsewhere in metals trading, gold prices were higher as investors awaited congressional testimony by Federal Reserve Chair Janet Yellen for clues to the pace of the central bank's interest rate increases.

Fed fund futures are pricing in less than a 15% chance of a rate hike in March, according to Investing.com's Fed Rate Monitor Tool, while odds of a June increase was seen at around 60%.

Investing.com offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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