Newspaper article The Evening Standard (London, England)

Copper Burns Brightly amid Fears of Shortage; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Copper Burns Brightly amid Fears of Shortage; MARKET REPORT

Article excerpt


BIG copper miners were caught up in yesterday's interest rate-related stock market sell-off, despite strong demand for the metal continuing amid growing concerns about the flow of supplies.

Although prices were off their best levels, dealers said prices were underpinned by news that workers at the world's largest mine, Chile's Escondida, had rejected the management's latest offer and were now threatening strike action. London Metal Exchange saw copper for three-month delivery touch $7795 a tonne - just a smidgen below the $7815 reached by close of trading yesterday. The price of nickel was down slightly, from $25,600 a tonne to $24,850, while zinc retreated from $3420 to $3385 a tonne.

Earlier this week Antofagasta benefited from an upbeat production report, although the amount of copper produced in the second quarter was slightly down on the previous quarter. This was attributed by the company to technical problems.

Broker Evolution was happy to raise its target price for the Chilean-based miner from 396p to 426p.

Short-term, brokers expect the price of metals such as copper to continue rising, boosted by demand from countries like China. That should benefit the likes of Antofagasta and Kazakhmys.

Supermarkets group Wm Morrison was one of the few bright spots yesterday on the back of its latest trading update, which indicated that the recovery in the group's fortunes were still continuing apace.

Broker ABN Amro is impressed with the group's progress at improving gross margins and calculates that this year's improvement could be nearer 60 basis points (0.6 of a percentage point) rather than the 30 previously indicated.

It repeated its buy rating on the shares.

Signet, owner of H Samuel and Ernest Jones jewellery stores, is the target of a possible bid from private-equity groups Apax and KKR. Signet is the world's largest speciality jewellery retailer with major operations across America.

The consortium, advised by Goldman Sachs, may offer around 132p a share, which would value Signet at more than [pounds sterling]2 billion. …

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