Dollar softens as concerns about supply persist. Copper prices rise.

The copper price rose slightly on Wednesday due to the ongoing disruption in mine supply, and a weaker dollar.

As of 0930 GMT, the London Metal Exchange reported that three-month copper was up 0.3% to $10,294.50 a ton. The markets in China, the world's largest metals consumer, are closed between October 1 and 8 for National Day.

Sucden Financial stated in a report that the absence of Chinese participants on the market "could result in increased volatility during the next few days, as the market appetite appears to be tilted to the upside."

The brokerage said that Freeport-McMoRan's announcement of force majeure at its Graberg Mine in Indonesia last week acted as a catalyst to move away from rangebound prices. However, any significant price increase may be limited by the key resistance level, which is $10,500 per ton.

A union leader revealed on Tuesday that the rejection of a new contract by the supervisors at Antofagasta’s Los Pelambres Copper Mine in Chile could exacerbate the Grasberg shutdown. This would pave the way for a possible strike.

After an accident at Codelco’s flagship mine, at the end July, the output of Chile’s top copper producer fell by 9.9% in August compared to the same month last year, the biggest drop in over two years.

The dollar's weakness also helped base metal prices, as it fell to its lowest level in a week against major currencies Wednesday due to the uncertainty caused by the U.S. shutdown. The dollar's weakness makes metals more accessible to holders of other currencies.

Aluminium rose by 0.2%, to $2.684.50 per ton. Zinc also increased by 0.2%, to $2.964, while lead rose by 0.1%, to $1.990.50. Nickel fell 0.4% to $16,180 while tin rose 0.8% to $35,605, its highest level since April 4. (Reporting and additional reporting by Lucas Liew, Editing by Harikrishnan Nair; Subhranshu Sahu, Shakesh Kuber and Harikrishnan Nair)

(source: Reuters)