Massive Quake In Chile Sends Copper Prices To 3-Week Highs

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The massive earthquake that rocked the northern part of Chile, the world's leading copper producer, also shook up copper prices; briefly sending them to three-week highs.

Copper rose to $6,728.75 per metric ton on the London Metal Exchange on Wednesday, its highest level since March 11.

The epicenter of the 8.2-magnatude quake was reported off the Chilean coast near the city of Iquique, a major shipping point for copper mined further inland in the Andes Mountains. At least six deaths have been blamed on the earthquake -- and nearly 900,000 people were evacuated from coastal regions in northern Chile, out of concerns of a tsunami.

But Codelco, the state-run Corporacion Nacional del Cobre de Chile, says its operations were not damaged, nor were any employees injured.

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The Anglo-Australian mining company BHP Billiton (NYSE: BHP) and Canadian firm Teck Resources (NYSE: TCK) also reported no disruptions at their Chilean mining operations – although some BHP Billiton personnel were evacuated from port facilities during the tsunami warning.

"Whether copper pushes higher now will in the short term probably depend on whether any of the mining infrastructure in Chile was damaged by the earthquake," Will Adams, head of research at FastMarkets, told the Wall Street Journal. "Before the quake copper prices were edging higher so we would not be surprised if it continued to recoup some of its recent losses."

Chile is one of the world's most earthquake-prone regions, so much of its housing and construction is designed to handle such tremors. But given the size of Tuesday's quake, questions remain about whether the nation's ports suffered any major damage.

"I would expect the largest danger is to infrastructure, namely ports and roads, which could obviously affect exports," Morgan Stanley analyst Joel Crane in Melbourne told Reuters.

Copper prices had been rising over the past several years, fueled in large part by the seemingly constant demand from China. But with the Chinese economy slowing down that demand has slackened.

Just last week, Codelco announced its output had dropped to a five-year-low, and its profit had been halved in 2013.

Posted-In: Chile Codelco Copper Copper Production Earthquake FastMarkets Joel Crane Iquique metals and mining Will AdamsNews Wall Street Journal Commodities Events Global Economics Markets Media Best of Benzinga

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