By Anna Stablum March 2 (Bloomberg) -- Copper fell from the highest in more than five weeks in London as mines reopened in Chile after a magnitude-8.8 earthquake halted operations and the dollar gained, reducing the investment appeal of metals. The quake struck Chile, the world’s largest copper miner, on the morning of Feb. 27. As power was restored to the mines state-owned Codelco, Antofagasta Plc and Anglo American Plc resumed mining operations. The U.S. Dollar Index, a gauge against six major currencies, rose for a second day, up as much as 0.8 percent, making dollar-priced commodities more expensive to other currency holders. “It is a terrible tragedy, but the mines were never that badly affected,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by phone. “We are now taking the cue from the broader market, especially currency markets.” Copper for three-month delivery fell $110, or 1.5 percent, to $7,290 a metric ton at 9:44 a.m. on the London Metal Exchange. The contract climbed as high as $7,600 yesterday, the highest intraday price since Jan. 20. Copper for May delivery eased 1.1 percent to $3.3125 a pound on the New York Mercantile Exchange’s Comex unit. Codelco, the world’s largest copper producer, reopened its 381,000-ton El Teniente mine on Feb. 28 after restoring electricity to the mine in central Chile. Output at its Andina mine was also expected to resume partial production yesterday, the Santiago-based company said. Anglo American, based in London, said it restarted its mining operations on Feb. 28 after power was “partially restored.” Chile produced 5.4 million tons of copper in 2009. ‘Relatively Unscathed’ Chile’s copper industry escaped the earthquake “relatively unscathed,” Tom Price, an analyst at UBS AG, said in a report yesterday. “We expect Chile to still deliver its forecast 34 percent of global mined copper supply in 2010.” Copper stockpiles monitored by the LME rose 0.2 percent to 552,325 tons. This year inventories have risen by 10 percent. Metal booked for delivery, or canceled warrants, surged 14 percent to 29,800 tons, according to a daily exchange inventory report. Bookings have jumped more than tenfold in 2010. “We forecast inventories to fall sharply through 2010 and 2011,” Paul Cliff, an analyst at Nomura Holdings Inc., said in a report yesterday. With inventories falling to “critically low levels” next year, prices “will need to remain high enough to eliminate the marginal unit of demand in order to ration limited supply,” Cliff said in the report. Nomura raised its average price forecast to $7,716 a ton for copper for immediate delivery for this year, from an earlier estimate of $6,614 a ton. Aluminum for three-month delivery on the LME fell 1 percent to $2,122 a ton, zinc shed 1.4 percent to $2,188 a ton and nickel lost 0.7 percent to $21,297 a ton. Lead fell 0.9 percent to $2,150 a ton and tin declined 0.3 percent to $17,000 a ton. --With assistance from Andres R. Martinez in Mexico City and Firat Kayakiran in London. Editors: John Deane, Stuart Wallace. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net. Related Articles

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