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METALS-Copper falls on inflation fears, Glencore’s African mine restart plan

PUBLISHED: Wed, 19 May 2021 07:59:39 GMT

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(Updates prices, adds quotes)

By Mai Nguyen

HANOI, May 19 (Reuters) – Copper prices fell on Wednesday due to worries over inflation and the prospect of higher supply from a Glencore mine in Africa which could restart as soon as next year.

Commodity trader and miner Glencore plans to restart operations at the currently idled Mutanda cobalt and copper mine in the Democratic Republic of Congo in 2022, a source with direct knowledge of the matter told Reuters.

Good news has largely been priced into copper at this level, but the metal is still in a bull trend “as this rally is fuelled by money printing”, commodities broker Anna Stablum of Marex Spectron said, adding that inflation worries were weighing on prices.

Three-month copper on the London Metal Exchange fell 1.3% to $10,269 a tonne at 0726 GMT, while the most-traded June copper contract on the Shanghai Futures Exchange closed 2% lower at 74,090 yuan ($11,522.91) a tonne.

LME copper has risen 32% so far this year, hitting a record high of $10,747.50 a tonne last week. Stablum said the elevated price will see more copper scrap supply emerge as a cheaper alternative to cathode.

The Yangshan copper premium <SMM-CUYP-CN>, which reflects Chinese demand for imported metal, rose for the first time since February on Monday to $38.50 a tonne, rebounding from a more than five-year low of $37 a tonne hit on Friday.

“I had heard from physical players in this region that they had received their first orders in many weeks last week… but I think it is too early to say this is a trend,” Singapore-based Stablum said.

FUNDAMENTALS

* LME aluminium fell 1.2% to $2,449.50 a tonne while ShFE aluminium dropped 2.3% to 19,290 yuan a tonne and ShFE lead advanced 1.6% to 15,575 yuan a tonne.

* “Treatment charges are too low, only 1,000-1,300 yuan a tonne. At such rates all smelters are running at a loss, some of them are facing production cuts or suspensions,” said a Henan lead smelter source.

* For the top stories in metals and other news, click or

($1 = 6.4298 yuan) (Reporting by Mai Nguyen; Additional reporting by Tom Daly; Editing by Subhranshu Sahu and Jan Harvey)

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