Wednesday, November 14, 2007

Earthquake in Chile Impacting Copper Prices

From Bloomberg:

“Copper jumped 6.1 percent in New York, the most in 16 months, after an earthquake hit Chile, the world's largest producer of the metal.

The 7.7 magnitude quake struck in Chile's northern desert, the U.S. Geological Survey said on its Web site. Chile's state- owned Codelco, the world's biggest copper company, and Freeport- McMoRan Copper & Gold Inc., the second largest, said some mines were restarting after a loss of power.

`You've seen a huge price jump after the earthquake news,’ said Eric Wittenauer, an industrial-metals analyst at A.G. Edwards & Sons Inc. in St. Louis. ‘This brings into question the supplies from the area and what kind of supply growth we'll be able to see in the region.’”

From Reuters:

“The quakes hit an area of many large copper mines. Chile is the biggest copper producer in the world, providing more than a third of annual supplies of the red metal.”

From FXStreet:

“The uncertainty surrounding the earthquake in Chile was high among copper futures traders immediately after wire service reported the event, said an analyst. He added that markets tend to "over-react" to such events, as traders always initially fear the worst-case outcome to such events. The midday Wednesday reports that operations at Codelco were back to normal should calm the copper market, said the analyst.”

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