GO
Loading...

Copper Prices Surge After Chile Quake

Copper prices hit 5-week highs on Monday, after a massive earthquake in Chile reportedly halted up to 20 percent of the country's output. But analysts are debating the longer-term market impact on the power and construction metal.

Three-month copper futures on the London Metal Exchange rose to $7,365 per tonne (metric ton) in official rings from $7,195 on Friday. The base metal jumped as much as 5.6 percent to $7,600, its highest since Jan. 20, and is in line for its biggest one-day increase in two weeks.

"Certainly this will push copper back towards $8,000," said John Meyer, an analyst at Fairfax in London.

Saturday's 8.8-magnitude quake and the ensuing tsunamis killed more than 700 people in Chile, wrecked hundreds of thousands of homes and mangled highways and bridges, dealing a heavy blow to one of Latin America's most stable economies. (See:Chile, Venezuela & More: LatAm Market Indices in Real Time)

"The market should be concerned that the supply for this year could be severely limited by this quake, but I don't think this earthquake alone is enough to reverse the supply/demand balance," Meyer said.

"We'll probably lose about 40,000 tonnes from the earthquake — two weeks of cut-back production," he said.

Up to 20 percent of Chile's copper mine capacity in Chile was halted. But the top mines slowly resumed operations on Sunday despite limited power supplies.

______________________________
Securities to Watch:

Freeport McMoRan Copper & Gold

Rui Tinto

iPath Copper ETN

MSCI Chile Index Fund

UBS E-TRACS CMCI Industrial Metals ETN

______________________________

______________________________
CNBC Data Pages:

______________________________

Disclaimer