Copper Rises on Diminished Rate Hike Fears and Supply Concerns

Copper prices rose for the second consecutive session on Monday, driven by a reduced likelihood of a US interest rate hike in October and potential strikes at major mines in Chile. Benchmark three-month copper on the London Metal Exchange (LME) climbed 0.8% to $14,365 per metric ton. The metal had reached a record high of $14,875 on September 10 before retreating last week.

Sandeep Daga, head of research at Metal Intelligence Centre, noted that copper was supported by an uptick in equities as the chances of an October rate hike by the US Federal Reserve diminished. Weaker-than-expected US jobs data last week lowered expectations of a rate increase, which would have dampened economic activity and reduced demand for industrial metals like copper.

On the supply side, workers at Antofagasta’s Centinela copper mine may go on strike starting October 13 if contract talks fail, while supervisors at BHP’s Escondida copper mine, the world’s largest, have rejected a contract offer. Traders are also watching China, the top metals consumer, as it returns from a week-long holiday on Thursday to assess buying interest in the fourth quarter.

The cash LME copper contract traded at a premium of nearly $63 per ton over the three-month forward, up from $53.50 on Friday, signaling tightening near-term supply. Other metals in the LME complex saw modest gains, with aluminium rebounding 0.6% to $3,117.50 per ton after hitting a three-month low. Zinc, lead, nickel, and tin also posted small increases.