- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:24 06:42 12:10 15:09 17:32 18:50
Copper is likely to climb when trading starts, lifted by uncertainty over supply after the world's top copper producer Chile was pounded by a massive earthquake, analysts said yesterday.
The earthquake, one of the world's most powerful in a century, battered Chile, killing more than 300 people as it toppled buildings and triggered tsunami waves hitting Pacific coastlines as far as Japan and Russian far east.
The quake forced temporary suspension of up to a fifth of Chile's mining capacity — estimated at around 4.5 million tonnes of copper in concentrate annually — after Codelco and Anglo American halted operations at four mines in total.
The government officials said exports would continue unhindered, but analysts expect prices will rise because of the possible disruption in infrastructure, power and transportation to the mines.
"While it appears that a modest proportion of production has been halted, the major impact may come from the disruption on deliveries from the mines and from the disruption of power supplies to the mines," said Citi analyst David Thurtell.
Mine workers' apartment buildings may have been destroyed," Thurtell said.
State miner Codelco halted operations at its El Teniente and Andina mines — which together had a combined annual output of 614,000 tonnes last year. Mining Minister Santiago Gonzalez said it could take two days for production to resume.
Anglo-American's Los Bronces and El Soldado mines, which together produce about 280,000 tonnes of copper annually, also halted operations, but other major mines were running as usual. Most of Chile's key mining industry is based in the north of the country. The quake struck in central Chile, 70 miles (115km) northeast of the city of Concepcion.
Many of the more distant mines rely on diesel to power generators to provide electricity and disruption to supply — either due to problems at the nations oil refineries, near the epicentre of the quake, or because the fuel is diverted to help with the relief effort — could have implications for output.
The earthquake, which tore up highways and bridges, also damaged two oil refineries run by state oil company Enap, and one official said diesel imports were being stepped up to ensure there were no shortages.
The benchmark LME three-month copper contract closed on Friday at $7,195 a tonne, having rallied 2.8 per cent on the day.
Traders said prices could rally by a similar amount.
Gonzalez added Codelco had enough stocks to be able to meet its export commitments, and a union leader said the key copper ports of Antofagasta and Mejillones were operating normally.
"The government has said shipments will continue normally but people will try to stock up on metal — the 30,000 tonnes that landed in Shanghai warehouses in the past two weeks will probably find eager buyers," a dealer in Singapore said.
Copper stocks in warehouses monitored by the Shanghai Futures Exchange jumped 28 per cent to almost 150,000 tonnes in the past two weeks and had looked like a potential drag on the market, but following the quake, Chinese merchants and consumers were likely to pick up the metal to ensure supply.
"The kneejerk will be to cover. The Chinese are starting to get into full swing after the holidays," Jonathan Barratt, Managing Director of Commodity Broking Services, said.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.