3 Min Read
* Copper builds on solid gains
* Escondida, Freeport supply woes dominate
* Currency-based buying ahead of Yellen speech supports (Updates prices)
By James Regan
SYDNEY, Feb 14 (Reuters) - Copper built on hefty overnight gains on Tuesday amid supply concerns from two of the world's biggest sources of the metal.
Investors also shifted into copper ahead of testimony from U.S. Federal Reserve Chair Janet Yellen later in the day, with the market looking for hints on the Fed's rate strategy.
Should Yellen talk up the chances of a rate increase in March, the U.S. dollar is likely to push higher after tracking lower in Asia in response to U.S. national security adviser Michael Flynn quitting.
"LME copper could get a little more expensive after Yellen," a commodities trader in Perth said.
Three-month copper on the London Metal Exchange rose 1 percent to $6,168 a tonne by 0700 GMT. The contract hit its highest since May 2015 on Monday at $6,204.
The most-traded copper contract on the Shanghai Futures Exchange rose 1.1 percent to 50,110 yuan ($7,292) a tonne.
But the main driver in copper remained the strike at the giant Escondida copper in Chile and the suspension of exports of copper concentrate from Indonesia's Grasberg mine.
At Escondida, workers went on strike last Thursday after the collapse of wage talks with owner BHP Billiton .
A day later, Freeport-McMoRan Inc said an export ban remained in place at the Grasberg mine over a permit dispute..
Freeport has also confirmed that copper concentrate production came to a halt on Friday.
"The copper market saw further pressure on supply, after Freeport halted copper concentrate output after it failed to secure a new mining permit for its Grasberg operation in Indonesia," Australia and New Zealand Bank said in a note.
Support was also coming from signs of strong demand for industrial commodities in China, the world's top market for copper.
China's producer price inflation picked up more than expected in January to near six-year highs, adding to views that global manufacturing activity is building momentum.
Elsewhere in metals, LME lead and zinc were slightly firmer at $2,434 and $2,941.50 a tonne respectively. Nickel turned positive after earlier losses, gaining 0.8 percent to 10,820.
In Shanghai, zinc and lead each slipped by less than a half-percent, while aluminium gained 2.9 percent.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin ($1 = 6.8723 Chinese yuan renminbi) (Reporting by James Regan; Editing by Richard Pullin)