METALS-Copper climbs on supply risks in Chile, Indonesia

By Lucas Liew

Oct 2 (Reuters) - Copper prices climbed on the London Metal Exchange on Thursday, buoyed by supply concerns in top producer Chile and major supplier Indonesia, while a weaker dollar provided additional support.

Three-month copper on the London Metal Exchange CMCU3 rose 0.79% to $10,461 per metric ton by 0722 GMT.

Weaker industrial activity across many parts of the world is being outweighed by mounting supply risks in Chile and Indonesia, while China's anti-involution drive is adding to bullish market sentiment, said ANZ analysts.

An accident at Chile's El Teniente copper mine in late July prompted Codelco to lower its 2025 output forecast by 30,000 tons.

Meanwhile, an accident at Indonesia's Grasberg mine led to a suspension of operations. Goldman Sachs estimates that the disruption could result in a total loss of 525,000 tons of copper mine supply.

Chile's copper output declined 9.9% year-on-year in August, its sharpest drop in over two years, per data from statistics agency INE on Tuesday.

The dollar index =USD, which measures the U.S. currency against six major peers, hovered near a one-week low of 97.459 reached overnight. It last stood at 97.731, flat from Wednesday's close, while a weak U.S. labour report bolstered bets for rate cuts. USD/

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

Meanwhile, copper stocks in the LME warehouse system MCUSTX-TOTAL fell to 141,725 tons, their lowest since the start of August.

China's manufacturing activity shrank for a sixth month in September, an official survey showed on Tuesday, with the Purchasing Managers' Index at 49.8, below growth threshold of 50.

Among other London metals, aluminium CMAL3 increased 0.8% to $2,710 a ton, lead CMPB3 gained 0.65% to $2,023.5, tin CMSN3 rose 0.56% to $36,215, zinc CMZN3 strengthened 0.94% to $3,015.5, and nickel CMNI3 climbed 0.4% to $15,245.

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