GLNCY Glencore Plc (PK)

By Ese Erheriene 

LONDON--Copper prices were higher in London on Monday, as the metal followed the share price of Glencore PLC, whose troubles have hurt sentiment in metals' markets.

Shares in the Swiss-based company were up almost 12.63% and trading back above GBP1 a share for the first time since Sept. 24.

Analysts said there was renewed investor confidence in the industrial metal following the rise in Glencore's share price. More positive trading on Asian and European markets also added a positive tone to copper trading.

The London Metal Exchange's three-month copper contract was up 0.9% at $5,147.50 a metric ton in midmorning European trade, a two-day high.

"We've had some pretty sold up surge," said Vivienne Lloyd, a base metals analyst at Macquarie. Ms. Lloyd said that the gains were linked to news that the Glencore was looking to sell all or part of its agribusiness in a bid to reduce its debt burden.

Glencore's debt levels have been a source of concern for investors.

Copper prices are particularly sensitive to sentiment around Glencore, which is a major producer of the base metal. The company accounted for 730,900 tons of global copper supply in the first half of 2015.

In London on Monday, chief executive Ivan Glasenberg said Glencore's strategy to remove 400,000 tons from the market by shuttering two large copper mines in Africa, stated in a broad balance-sheet restructuring plan last month, "should have an effect on the price" as consumption ultimately outweighs production.

On the demand side, market participants continue to worry about the economic health of copper's top consumer China. Some analysts believe that this will cap copper's gains.

"We retain our forecast for the fourth quarter of copper averaging $4,850/ton, suggesting further weakness to current prices," said Barclays in a note.

Among the other base metals, aluminum was trading down 0.3% at $1,553 a ton, zinc was down 0.3% at $1,679 a ton, nickel was up 0.2% at $10,010 a ton, lead was down 0.1% at $1,642 a ton and tin was down 0.5% at $15,500 a ton.

Scott Patterson contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

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(END) Dow Jones Newswires

October 05, 2015 08:04 ET (12:04 GMT)

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