Copper recently dipped below its support level of $6037 per ton on the LME to trade at $5940. Even though this added technical selling pressure, from a percentage basis the metal was only fractionally lower as mixed readings on the supply situation left traders undecided. Resistance was at $6250.
Shanghai weekly holdings jumped by 18,000 tons this week, but this was partially offset by an overnight draw of 7,600 tons on the LME.
Meanwhile, Friday morning it went out on the wire that Freeport-McMoRan declared force majeure on concentrate production from its Grasberg mine. However; earlier in the day, Reuters reported that the Indonesian mining ministry told Freeport it would recommend that the company is permitted to resume copper concentrate exports. The different reports may appear contradictory; however, even if Freeport is granted permission to resume copper concentrate exports in the near-term, it still may require force majeure in the meantime.
Meanwhile, in Chile, striking union workers at BHP Billiton’s Escondida mine are in ongoing government-mediated talks with the company. The union agreed to the talks earlier this week, but, according to chatter, the two sides are still far apart in reaching an agreement that would result in the striking employees returning to work.
Other copper market developments this week included a Reuters reports that copper concentrate TC/RCs dropped to their lowest level in over seven months on Wednesday, to 81.9 per ton/8.19 cents per pound. Also, Metal Bulletin said that Peru’s copper output hit a record high of 2.35 million tons in 2016, supported by investment in new projects and the expansion of the Cerro Verde mine.