BY ONOME AMUGE
Copper prices surged to a four-week high as a decline in output from Chile, the world’s largest producer and demand for more sanctions on Russia, another top producer of the red metal used in power and construction, heightening concerns over supply crunch.
Benchmark copper on the London Metal Exchange (LME) slipped 0.2 percent to $10,445 a tonne in official trading. However, this was after it reached $10,580, its highest in four months, close to last month’s record high of $10,845.
Market reports show that copper prices have risen seven percent in 2022 in reaction to the geopolitical tensions, while the Chilean government disclosed that the country’s copper production plunged 7.5 percent in February to 394,700 tonnes.
Commenting on this, Daniel Briesemann, commodity analyst at Commerzbank, said Chilean copper production was incredibly low in February.
Briesemann posited that prices will rise further, before falling towards year end.
Zinc is another base metal facing tight supplies as on-warrant inventories in LME-registered warehouses tumbled to 64,025 tonnes from 130,000 tonnes in mid-March.
Though LME zinc shed 2.3 percent at $4,269 a tonne following the day’s trading activities, the metal still stands around 20 percent higher in 2022, having reached a record high last month.
Prices of other base metals on the LME were mixed as aluminium lost 0.2 percent at $3,440 a tonne, nickel climbed 1.4 percent to $33,725 a tonne, lead dropped 0.3 percent to $2,406 a tonne, and tin was 0.7 percent stronger at $44,475 a tonne.