Copper heads for weekly gain, aided by supply disruptions

Oct 3 (Reuters) - Copper prices rose for the third consecutive session on Friday and are set for a weekly gain as supply disruptions continue to weigh amid accelerating demand for the metal.

Three-month copper on the London Metal Exchange extended gains and was up 0.72% at $10,566 per metric ton by 0715 GMT, having reached a 16-month high on Thursday.

The contract is set to end the week up 3.75%.

Recent attention has focused on copper supply disruptions, especially following Freeport's declaration of force majeure at its Grasberg mine in Indonesia.

The world's second-largest copper mine, Grasberg accounts for 3% of global concentrate production. Analysts estimate the disruption could result in a loss of 591,000 tons of copper output between September 2025 and the end of 2026, prompting Goldman Sachs, Citi, and Bank of America to raise their price forecasts.

The dollar index, which measures the U.S. currency against six major peers, is on track for a 0.35% weekly decline, its biggest drop since early August. 

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

Copper demand is expected to accelerate, driven by the green transition, development of AI data centres, and increased global rearmament, analysts at SGCIB said.

Globally, factory activity contracted in many regions, driven largely by sluggish manufacturing in China, where weak domestic demand and the anticipated impact of U.S. tariffs continue to weigh on the economy.

Elsewhere, copper inventories were down 2.05% week-on-week to 140,950 tons as of 29 September.

Among other London metals, aluminium increased 0.02% to $2,693 a ton, nickel strengthened 0.38% to $15,375, lead edged up 0.27% to $2,029.5, tin rose 1.46% to $37,425, and zinc gained 0.33% to $3,030.5.