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London copper rose on Tuesday to its highest in nearly a week, as a drop in output from top producer Chile and the potential for more sanctions on Russia raised risks of supply shortages.
Three-month copper on the London Metal Exchange CMCU3 was up 0.8% at $10,553.50 a tonne, as of 0647 GMT, after a 1.1% gain in the previous session.
“With potentially further sanctions on Russia, there’s some concern that we may have further disruption of commodity supply chains,” said Ilya Spivak, a currency strategist at DailyFX.
The United States and Europe were planning new sanctions to punish Moscow over civilian killings in Ukraine, and President Volodymyr Zelenskiy warned more deaths were likely to be uncovered in areas seized from Russian invaders.
Chile’s copper production fell 7.5% in February to 394,700 tonnes, the State Chilean Copper Commission (Cochilco) said in a report on Monday.
“Chile is sort of the premier copper destination and if we have a disruption in alternative supply like Russia with sanctions, that of course feeds onto itself,” Spivak added.
Trading was thin on Tuesday, with markets in top metals consumer China still closed for a public holiday.
The major Chinese financial centre of Shanghai extended restrictions on transportation on Tuesday after a day of intensive city-wide testing saw new cases surge to more than 13,000, with no end to the lockdown yet in sight.
Meanwhile, the U.S. dollar held firm near one-week high on talks of more sanctions against Moscow, making greenback-denominated metals more expensive to buyers using other currencies.
STOCKS: Asian stocks rose to their highest in more than a month on Tuesday, underpinned by a broad recovery on Wall Street. MKTS/GLOB
LME PRICES: Aluminium CMAL3 rose 0.6% to $3,466 a tonne, zinc CMZN3 eased 0.3% to $4,329.75, lead CMPB3 edged 0.2% higher to $2,417, and tin CMSN3 lost 1.1% to $43,665.