Forexpros – Copper futures regained strength on Wednesday, re-approaching a one-month high after copper production and shipments were halted at the world’s second largest copper mine, while speculation China could loosen monetary policy in the near-term provided further support.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.508 a pound during European morning trade, surging 2.55%.
It earlier rose by as much as 2.78% to trade at a daily high of USD3.522 a pound. Prices rose to USD3.537 a pound on Tuesday, the highest price since September 22.
The world’s second largest copper producer Freeport McMoran Copper & Gold halted production and shipments of copper from its strike-hit Grasberg mine in Indonesia after gunmen attacked a patrol car near the troubled mine for the second consecutive day.
Workers at the world’s third-largest copper mine have been on strike since September 15, demanding that current salaries of USD1.50 an hour be pushed to as high as USD7.50.
At least eight people have been killed since the strike began, among them two striking workers who were shot by police.
The company expects to lose nearly 100 million pounds of copper output this year due to the strikes after production at the Grasberg mine fell 15% in the first nine months of the year from the same period a year earlier.
Copper prices found further support after Chinese Premier Wen Jiabao said earlier that economic policy will be “fine-tuned as needed”, while adding that, “officials will make adjustments at a suitable time and by an appropriate degree.”
The comments boosted speculation that Beijing could ease monetary policy to support economic growth in the world’s largest copper consumer.
Meanwhile, commodity traders continued to eye developments out of Europe in regards to the region’s ongoing debt crisis.
European Union leaders will meet for the second time in four days later Wednesday in an effort to reach agreement on measures to boost the size the region’s rescue fund, recapitalize banks and restructure Greek sovereign debt.
Elsewhere on the Comex, gold for December delivery rose 0.83% to trade at a one-month high of USD1,714.55 a troy ounce, while silver for December delivery rallied 2.2% to trade at a one-month high of USD33.78 a troy ounce.
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