Copper bucks sentiment with gains on supply woes
Mining News Pro - Unions called for a two-week shutdown in a Chilean mine, while Peru’s copper-mining industry was near full output, leading to concerns about supply.

Copper prices advanced as supply concerns mounted with the giant mines of South America sending mixed signals on the outlook for production.

In Chile, the biggest copper-producing nation, unions called for a two-week shutdown at the Chuquicamata mine after the death of a second worker.

In Peru, the second-largest producer, the industry is nearing full output again after halting for two months when the COVID-19 pandemic hit.

Risks to copper supply are offsetting worries about the demand outlook as major economies battle a new wave of coronavirus infections.

Many mines are still operating with reduced staff amid the pandemic, inventories are falling and scrap is scarce.

UBS Group AG sees demand outstripping production this year amid supply disruptions.

“Investors remain anxious about supply risks from Latin America,” BMO Capital Markets head of metals derivatives trading Tai Wong said. “Chilean supply has held up well, but labor concerns can flare quickly.”

Copper for three-month delivery on Friday rose 0.5 percent to settle at US$5,893 a metric tonne on the London Metal Exchange (LME).

The commodity posted its sixth straight weekly gain and its best quarter since 2010.

UBS analysts project a 300,000-tonne deficit this year, compared with an earlier forecast for a surplus of 900,000 tonnes.

Macquarie Group Ltd commodities strategist Vivienne Lloyd said in a note that “copper’s COVID-19 mine disruption tally is now closing in on half a million tonnes — five times the 100kt we estimated back in March.”

Other metals:
‧Industrial metals on the LME were mixed, with aluminum falling and zinc advancing.

‧In precious metals, gold for August delivery rose US$9.70 to US$1,780.30 an ounce, up 1.5 percent for the week, while silver for July delivery rose US$0.14 to US$18.04, up 1 percent weekly.

The outlook for wheat harvests in the EU’s top shippers is growing slimmer, shrinking export prospects for the season that starts next month.

The soft-wheat crop in France, the bloc’s largest grains producer, is seen at 30.3 million tonnes this year, down by more than one-fifth from last year’s near-record haul, the European Commission said on Thursday.

Romania’s harvest is to run more than 10 percent below the five-year average, and Germany’s crop is also dropping from last year.

Europe’s wheat growers have faced a season of tumultuous weather, bookended by an overly wet autumn that hampered plantings and spring drought that cut yields.

EU soft-wheat exports in the coming year might fall by more than one-quarter from last year to 25 million tonnes, the commission said.

Still, a cooler, rainier May and June have helped to stabilize conditions, German farmers’ union DBV said in a report on Thursday.

French soft-wheat conditions held unchanged for a fourth week as of Monday, FranceAgriMer data showed.

Harvests have just begun across the bloc, with the bulk of the crop to be collected next month.

Rising crop forecasts in other key shippers, such as Russia, have helped to keep wheat prices at bay, and bulging global corn and barley harvests could help to offset some of the shortfall.

Paris milling-wheat futures are trading lower than a year earlier, and it is unclear how the pandemic will ultimately impact trade.