Page last updated at 13:49 GMT, Sunday, 28 February 2010

Chile earthquake dents copper output

Copper coils
Fears of production problems mean copper prices look set to rise

Uncertainty over the impact Chile's earthquake will have on copper production is likely to mean higher prices, according to analysts.

Chile is the world's biggest copper miner, and although officials have promised to honour its export commitments, supply worries remain.

Production at four major mines was suspended - affecting around 20% of the country's capacity.

Chile's mining minister said it could take two days for production to resume.

Risk premium

Aside from the direct impact of the disaster on the mines themselves, there are other factors that could slow the production process, such as transport and power supplies.

Jonathan Barratt, managing director of Commodity Broking Services, said: "People will start to build in a risk premium early on Monday. That will remain for as long as uncertainty exists and things like assessing the impact on fuel supplies and so on will take some time."

On Friday, the main three-month copper contract closed at $7,195 a tonne.

One Singapore trader was quoted saying the price could rise to $7,400.



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FROM OTHER NEWS SITES
Reuters UK UPDATE 2-Oil steady below $79 as dollar remains firm - 33 mins ago
China Post Curfew imposed in quake-stricken towns - 3 hrs ago
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Insurance and Technology Chilean Troops Patrol Quake-stricken Towns - 6 hrs ago
Mining Weekly Chile mines reopen after quake, power coming back - 9 hrs ago
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