Copper prices resumed their rally on Friday, set for the longest run of weekly gains this year, due to disruption in supplies from key producers, more specifically Chile as Covid-19 infections grow in Latin America.
Copper futures are meanwhile trading at $2.662, preparing for the sixth consecutive weekly advance, while the London Metal Exchange climbed 0.87 percent to $5,922.28 a tonne.
Given the fact that Chile is responsible for the more than a quarter of the world’s copper production, the rise in corona virus there is threatening the future supply of the industrial metal, especially to Chinese factories.
Chile’s Codelco, the world’s biggest copper miner, said on Thursday it was hanging refinery and foundry operations at its sprawling Chuquicamata division to slowdown the spread of Covid-19.
Meanwhile, Chile is considered a hot spot for the global pandemic and miners are suffering from reduced workforce. Therefore, the copper market is facing supply disruptions risk, where Chinese smelters are reeling from low supplies of semi-processed copper from mines.
While the industrial metal should move in line with risky assets, the resurgence in corona infections in the U.S. has added to worries about supply disruptions and pushed its prices upwardly.
Having rebounded strongly since late March, LME copper is highly anticipated to resume its surge until $6,300 in the third quarter, clawing back to January levels.