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
"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.
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Securities to Watch:
Freeport McMoRan Copper & Gold
Rui Tinto
iPath Copper ETN
MSCI Chile Index Fund
UBS E-TRACS CMCI Industrial Metals ETN
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