METALS-London copper climbs as shorts cover on Glencore cutbacks

Mon Sep 7, 2015 4:25am EDT
 
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* Signs of emerging copper demand supporting prices -UBS

* U.S. markets closed for Labor Day holiday

* Potential copper output cuts by Glencore fuel rally (Adds analyst, trader comment; updates prices)

By Melanie Burton

MELBOURNE, Sept 7 (Reuters) - London copper rallied on Monday as news of planned production cuts at the African copper operations of miner trader Glencore fuelled a short-covering rush.

Glencore said that management at its Katanga Mining unit in the Democratic Republic of Congo had begun a review of operations, and that a similar review had started at Mopani Copper Mines in Zambia in light of the challenging environment for commodities, which would cut some 400,000 tonnes of copper production.

"This is likely to materially improve the supply and demand balance of copper," said Citi in a note.

Glencore also said it would suspend dividends, sell assets and raise $2.5 billion in a new share issue as it aims to cut its debt by a third to $20 billion by the end of next year.

Three-month copper on the London Metal Exchange jumped by 1.4 percent to $5,192 a tonne, cutting 2.4 percent losses from the previous session.   Continued...