Copper Fluctuates as World's Third-Largest Mine Reaches Shipment Accord

Copper fluctuated in London after the world’s third-biggest mine reached an agreement on shipments, reducing the chance that supply might be interrupted.

Anglo American Plc and Xstrata Plc’s Collahuasi venture in Chile said it signed an accord with the port of Arica “recently” after a port accident forced the rerouting of shipments. JPMorgan Securities Ltd. said copper demand may slow this year in China, the world’s largest consumer.

“Resumption of shipments, in addition to existing arrangements, has helped calm the market a bit,” said Leon Westgate, an analyst at Standard Bank Plc in London.

Copper for delivery in three months fell $20, or 0.2 percent, to $9,630 a metric ton at 6:55 p.m. on the London Metal Exchange. Prices climbed as much as 0.6 percent and lost as much as 0.9 percent. Copper for delivery in March dropped 0.6 percent to $4.3845 a pound on the Comex in New York.

Copper consumption growth in China may almost halve this year as the government curbs monetary expansion, cooling demand, Michael Jansen, a strategist at JPMorgan Securities, said at a conference in Shanghai on Jan. 15. Real consumption is likely to gain about 7 percent to 7.88 million tons, down from 13 percent in 2010, he said.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.5 percent. A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies.

Hedge Funds

Hedge-fund managers and other large speculators decreased their net-long position in New York copper futures in the week ended Jan. 11, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 30,107 contracts on the Comex, the commission said Jan. 14. Net-long positions fell by 1,506 contracts, or 5 percent, from a week earlier.

Tin for three-month delivery on the LME added 0.4 percent to $26,950 a ton. Last year’s best performer among the six main LME metals may rally to a record $40,000 as global supply might lag behind demand until at least 2013, according to Malaysia Smelting Corp. Prices reached an all-time high of $27,500 on Nov. 9.

Nickel dropped 0.2 percent to $25,835 a ton. “We still see strong downside risks to nickel prices as the year progresses,” Goldman Sachs Group Inc. said in a report today.

Zinc fell 0.1 percent to $2,455 a ton. Inventories of the metal tracked by the LME climbed 11 percent in two sessions on Dec. 13 and 14.

Aluminum declined 1.5 percent to $2,435 a ton and lead fell 1.5 percent to $2,641 a ton.