Copper Surges On China Growth, Mine Closure
February 10 2017 - 10:21AM
Dow Jones News
By Katherine Dunn
Copper prices jumped to the highest in over a year on Friday
amid signs of Chinese growth, a strike at the world's largest
copper mine and talk of tax cuts in the U.S.
Futures for March delivery were recently up 4.2% at $2.7655 a
pound on the Comex division of the New York Mercantile Exchange,
trading at the highest level since May 2015. Prices are on track
for the biggest one-day gain since September 2015.
"There's lots of things people can take as positive for [copper]
for the time being," said Liz Grant at Sucden Financial Limited in
London.
Economic data from China released on Friday showed that both
total export and import figures for January were far higher than
expected. Exports jumped 7.9% in January from a year earlier, while
imports rose 16.7% on year, jumping 3.1% from December. China is
the world's largest consumer of copper and base metals.
Friday was also the second day of a union strike at the
Escondida mine in northern Chile, which is owned by BHP Billiton
Ltd. The mine produces roughly 5% of the world's total copper
supply. On Friday, the mine said it won't be able to fulfill
contracts for copper deliveries or shipments, according to a BHP
spokesperson.
"The last couple of days the market's been quite strong on the
back of the strike in Chile," said Ms. Grant. Copper is up more
than 5% so far this week.
Meanwhile, markets were broadly higher on Friday after comments
by President Donald Trump on Thursday that a plan to lower business
taxes was "ahead of schedule." Mr. Trump said Congress would
receive an outline of the plan by the end of the month.
"There's still a lot of optimism about the pro-growth politics
in the U.S.," said Nitesh Shah, commodities strategist at ETF
Securities in London. Expectations of those policies, paired with
strong Chinese speculative demand, helped the copper market rally
sharply late last year.
The details of the policy are still scant, Mr. Shah added, and
have to be weighed against the impact of more trade barriers on the
market.
"It hasn't sunk in just how damaging protectionism will be," he
said.
Stephanie Yang contributed to this article
Write to Katherine Dunn at Katherine.Dunn@wsj.com
(END) Dow Jones Newswires
February 10, 2017 11:06 ET (16:06 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
BHP (NYSE:BHP)
Historical Stock Chart
From Apr 2024 to May 2024
BHP (NYSE:BHP)
Historical Stock Chart
From May 2023 to May 2024