Base metals were up on Wednesday. Copper climbed 6.44 cents to close at $2.5018/lb. Nickel gained more than 15 cents to finish at $7.2885/lb. Zinc added nearly two pennies, ending at $0.7529/lb. Aluminum rose half a cent, closing at $0.7685/lb., while lead moved to $0.7666/lb., up a penny and three-quarters from the previous session.
Copper closed at a new high for the year on concern that production disruptions in Chile will diminish supplies amid record imports by China, the world’s largest user.

Bloomberg reported that Output at Collahuasi mine in Chile, the world’s largest producer, will likely be cut following an “incident” that involved electrical equipment, according to a union leader. This comes at a time when China’s imports of the metal surged to record levels for a fifth month in June.

“A lot of fund money has been flowing into the copper market in China,” Wang Zhouyi, analyst at China International Futures (Shanghai) Co., said yesterday. “Many investors are very optimistic about economic recovery and so any news about potential output shortfall is good news for the market.”

The damage at Collahuasi, which is controlled by Xstrata Plc (LON:XTA) and Anglo American Plc (NASDAQ:AAUK), is being assessed, a Xstrata spokeswoman said yesterday. The mine produced 415,000 tons of copper last year.

In company specific news, Reuters reported that a Chinese firm plans to invest about $3.6 billion in copper exploration and mining in Zambia, reflecting growing Chinese interest in the country’s mineral wealth, a senior investment official said yesterday.

Zambia Development Agency (ZDA) Spokeswoman Margaret Chimanse said Zambia and Zhonghui Mining Group signed an investment agreement on Tuesday.

“The $3.6 billion will be invested by Zhonghui in the first five years (from 2009) and it is likely to be increased depending on economic factors affecting the copper industry,” Chimanse told Reuters.

Source: Copper Hits New High for Year