Copper Prices Surge Amid Accident at Key Chilean Port

Pre-holiday trading volume was thin as market participants eyed a devastating accident at Chile's key copper export port, resulting in a 0.8% gain in the most actively traded Comex copper futures contract. The accident, which included the deaths of three people when a shiploading arm collapsed, halted operations at the Patache port, a key facility for the world's largest copper mine, Collahuasi. As the market struggled to assess the impact of the accident, copper prices continued to set fresh records, driven by concerns over a global copper supply shortfall and the tightly balanced market.

Key Takeaways:

• Copper prices surged 0.8% in pre-holiday trading volume as an accident at Chile's key copper export port sparked concerns over global supply.
• The accident, which occurred at the Patache port, halted operations and resulted in the deaths of three people when a shiploading arm collapsed.
• Collahuasi, one of the world's largest copper mines with an annual production of around 550,000 metric tons, is controlled by mining companies Xstrata PLC, Anglo American PLC, and Mitsui & Co.
• Analysts downplayed the immediate impact of the accident, citing the recent transportation of copper by ship from the port, but warned that an extended outage could have significant effects on the market.
• Thin trading volume ahead of the Christmas holiday helped lift copper prices, with trading volume falling by 30% between Wednesday and Friday of last week.

Statistics:

• Copper prices gained 0.8%, or 3.1 cents, to $4.1900 per pound on the Comex division of the New York Mercantile Exchange.
• Trading volume fell by 30% between Wednesday and Friday of last week, with some market participants having already begun their holiday break.
• Collahuasi's annual production is approximately 550,000 metric tons, making it one of the world's largest copper mines.

Sources:

• Dow Jones Commodities News via Comtex
• Standard Bank (via Leon Westage)
• MF Global (via Edward Meir)
• Dow Jones Newswires
• Dow Jones & Company, Inc. (Copyright 2010)