METALS-LME copper rises on Chile output slump

By Lucas Liew

Oct 1 (Reuters) - London copper futures strengthened on Wednesday, as investors weighed supply concerns following top-producer Chile's steepest output drop in over two years.

Three-month copper on the London Metal Exchange CMCU3 gained 0.14% to $10,283 per metric ton by 0250 GMT.

Chile's output fell 9.9% year-on-year in August on the back of an accident at Codelco's flagship mine on July 31 that killed six people. The company, the world's top copper producer, was forced to halt mining and smelting operations, which knocked 33,000 metric tons off the facility's output forecast for 2025.

Meanwhile, major Japanese copper producer Mitsubishi Materials expects second-half output to remain flat, matching levels from a year earlier.

Elsewhere, miner Freeport-McMoRan remains in discussions with the Indonesian government regarding rights to operate the Grasberg copper mine past 2041.

Freeport declared force majeure at the mine last month due to torrential mudslides, which killed two workers. The mine is not expected to return to pre-accident operating rates until at least 2027, weighing on global copper supplies.

Meanwhile, the dollar index =USD, which measures the U.S. currency against six major peers, hovered near a one-week low as the U.S. government heads towards a likely shutdown. USD/

A softer dollar makes greenback-denominated assets more affordable to holders of other currencies. FRX/

Copper inventories in Shanghai warehouses fell 3.8% from last Friday, while lead inventories fell 14.9%. The weekly stock report was published early as China's market will be closed from October 1 to 8 for the National Day holiday.

Among other London metals, aluminium CMAL3 climbed 0.11% to $2,683.5 a ton, lead CMPB3 rose 0.13% to $1,991, and zinc CMZN3 edged up 0.05% to $2,961.5, while nickel CMNI3 eased 0.16% to $15,210, and tin CMSN3 fell 0.23% to $35,330.

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DATA/EVENTS (GMT)
1345 US S&P Global Mfg PMI Final Sep

1400 US ISM Manufacturing PMI Sep

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