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General Market Commentary
Topics:
General Base Metals
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General Market Commentary
Copper price rallies again after Grasberg violence
Copper futures trading on the Comex market in New York rallied again on Monday spurred by troubles at the world's second largest copper mine and large-scale speculators positioning themselves for a continued run in prices.
In huge volumes of nearly 3 billion pounds by lunchtime copper for delivery in September jumped to a high of 3.0025 a pound ($6,619 per tonne), up more than 2% from Friday's close to the highest since November 2014. December copper topped $3.02 a pound in early trading.
Copper's 2017 year to date gains in percentage terms now top 19% and the red metal has recovered 55% in value after falling to six-year lows below $2.00 a pound in January last year.
At least seven people were injured and dozens of vehicles and buildings torched over the weekend as former workers at the mine in the remote Papua province clashed with security forces
After a relatively uneventful supply environment in 2016, several outages at some of the world's biggest mines have brought supply issues back in focus this year. During the first quarter some 10% of global production went offline for a period including an ongoing strike action at Freeport McMoRan's Grasberg operations in Indonesia.
Phoenix-based Freeport is having a torrid time at Grasberg, the world's second largest copper mine and major gold producer, and over the weekend former workers at the mine in the remote Papua province clashed with security forces.
Reuters reports at least seven people were injured and dozens of vehicles and buildings torched. Freeport said it plans to open access roads closed over safety concerns on Monday.
Last week Freeport said flash floods at Grasberg destroyed roads, bridges and water lines and one worker remains unaccounted for. The impact on operations have not been quantified but a spokesperson for the Indonesian unit said the main processing mill at the extensive complex may also be affected.
Freeport's temporary exporting licence is coming up for renewal in October, a bargaining chip used by Jakarta as it negotiates with the Phoenix-based company about divesting a majority stake in its Indonesian subsidiary.
Last week flash floods at Grasberg destroyed roads, bridges and water lines and one worker remains unaccounted for
Grasberg produced 354,000 tonnes of copper and 580,000 ounces of gold during the first half of 2017 out of total production for the company, the world number one listed copper producer of 790,ooo tonnes. Freeport produced 1.7m tonnes of copper last year.
Shares in Freeport (NYSE:FCX) rallied on Monday adding more than 4% for a market value of $21.3 billion. The stock is up 11.7% in 2017 in line with better metals markets.