Metals: Energy crisis pushes copper towards best week since 2016

Nyrstar NV

15/10/2021 12:49

(Updates throughout, adds LONDON dateline)
    LONDON, Oct 15 (Reuters) - Copper on Friday was heading for
its biggest weekly gain since 2016 as surging power prices
threaten to curb supply at a time when exchange stockpiles are
at rock bottom. 
    A rapid rise in the cost of energy and shortages of power in
China have already forced zinc and aluminium smelters to cut
output, pushing prices of both metals to their highest in more
than a decade.  urn:newsml:reuters.com:*:nL1N2R90G2  urn:newsml:reuters.com:*:nL1N2R4110
    Benchmark copper  CMCU3  on the London Metal Exchange (LME)
was up 2.1% at $10,191.50 a tonne at 1132 GMT, up 9% this week
and nearing a record high of $10,747.50 reached in May.     
    High power costs are also inflationary and this is boosting
demand from investors for copper and other physical commodities
as a hedge, said Saxo Bank analyst Ole Hansen.
    "It looks like we've got clear air ahead of us to that May
peak," he said. 
    
    ENERGY: The energy crisis in China, the biggest metals
producer and consumer, deepened as cold weather swept into much
of the country.  urn:newsml:reuters.com:*:nL4N2RB0AV 
    IMPACT: High power prices and potential shortages will
impact supply more than demand for metals in the coming months,
analysts at ANZ said. 
    COPPER STOCKS: On-warrant copper inventories in
LME-registered warehouses have tumbled to 14,150 tonnes, the
lowest in at least 20 years, and stocks in the Shanghai Futures
Exchange (ShFE) at 41,668 tonnes are the lowest since 2009.
 MCUSTX-TOTAL   CU-STX-SGH 
    COPPER SPREAD: Low stockpiles have pushed the premium for
cash copper over the three month contract to $246 a tonne, the
highest since 2005.  CMCU0-3 
    SURPLUS: The international zinc and copper study groups said
this month they expected both metals to be oversupplied next
year, but analysts say the power crisis could change that.
 urn:newsml:reuters.com:*:nL1N2R80JP  urn:newsml:reuters.com:*:nL1N2R30GJ    
    ZINC: LME zinc  CMZN3  was up 5.8% at $3,733.50 a tonne
after reaching $3,761, it's highest since 2007. It was up a
whopping 19% this week after Belgium-based Nyrstar  NYR.BR  said
it would cut production by up to 50% at its three European zinc
smelters.  urn:newsml:reuters.com:*:nL1N2R90G2
    ALUMINIUM: Aluminium  CMAL3  was up 2.1% at $3,183 a tonne
after touching $3,215, the highest since 2008. It was up more
than 7% this week.  urn:newsml:reuters.com:*:nL1N2R4110
    OTHER METALS: Nickel  CMNI3  was up 2.8% at $19,825 a tonne,
lead  CMPB3  rose 1.8% to $2,340.50 and tin  CMSN3  added 1% to
$37,290. 

 (Reporting by Peter Hobson
Additional reporting by Mai Nguyen in Hanoi
Editing by Kirsten Donovan)
 ((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))
 
(( For related news and prices, click on the codes in brackets:
 LME price overview       RING=  COMEX copper futures   0#HG: 
 All metals news          MTL    All commodities news       C  
 Foreign exchange rates  FX=     SPEED GUIDES  LME/INDEX ))