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After Glencore shutdown, has copper found a floor?

Copper prices rose sharply on Monday after commodity giant, Glencore, revealed plans to suspend some of its copper operations, pulling 400,000 tons of the red metal off the market in a debt-cutting exercise.

Copper prices found some much-needed support on the news, with three-month copper climbing on the London Metal Exchange. It then pared some gains to trade at $5,145.50 per ton.

Read MoreGlencore shares soar on fightback plans

Copper production in Johor, Malaysia
Munshi Ahmed | Bloomberg | Getty Images
Copper production in Johor, Malaysia

Glencore's cut to its production follows the announcement from U.S. miner Freeport-McMoran at the end of last month that it plans on suspending some of its copper operations, which analysts now say could point to the bottom of the commodities cycle that has seen prices hit multi-year and historic lows this year.

"They (Glencore) will cut copper production from the African copper assets, so that decision in and of itself will help tighten the market for that metal which is one of Glencore's most important. It just goes to show how far we have gone down for the industry to withstand further falls in the commodity prices," senior metals and mining research analyst at Sanford Bernstein, Paul Gait told CNBC.

"This is close to the bottom of the cycle for commodities; it certainly feels like that from my perspective, signs today are indicative of that," Gait said.

Read MoreCopper faces long bear market: Goldman

Glencore said it would suspend production at its copper operations in the Democratic Republic of Congo and Zambia, adding that suspending production for 18 months would remove about 400,000 tons of copper off the market.

Gait said he sees more value in the stock following the announcement on Monday that will also see the miner reduce its net debt to around $20 billion from around $30 billion. On Monday, shares in the Anglo-Swiss company traded more than 12 percent higher on the London Stock Exchange at one point, boosted by the announcement.

"The spot price in Glencore, reflects the spot price for copper. Both of those are at extremely supressed levels, we have got an outperform rating on the stock predicated on the outperform assets that the stock possesses. This is close to the bottom of the cycle for commodities; it certainly feels like that from my perspective, signs today are indicative of that," Gait added.

Oil and copper have been some of the main casualties of the fears surrounding the slowing of China's economy which have sparked severe volatility in financial markets over the summer.

So far this year, copper traded on the LME is down around 22 percent, a move which has been more severely reflected in Glencore's share price which has tumbled some 54 percent over the same period making it the worst performer on London's FTSE 100.

In August, the company unveiled a first-half loss of $676 million.

Wall Street saw Glencore's move as both positive for shareholders and the price of copper. Bank of America Merrill Lynch upgraded the stock rating to neutral, analysts at Citi said the measures now comfortably place the firm in investment grade territory. Bernstein is sticking with its "outperform" rating and said the move removes a degree of uncertainty over the company's ability to repay debt.

"We think this should tighten the copper market and help put a floor under prices. Glencore's CEO, Ivan Glasenberg, is putting his money where his mouth is, having often chastised fellow CEOs for oversupplying commodity markets. Wow!," said analysts led by Jason Fairclough at BofA ML in a note to clients published shortly after the news.

Similarly RBC analyst Timothy Huff said the new measures should be "accretive to copper market fundamentals."