LONDON: Copper hit a six-week high on Tuesday as concerns about the potential supply impact of wage negotiations at the world’s biggest copper mine helped push prices back above $7,000 a tonne.
The union at BHP’s Escondida facility in Chile said on Friday that it had started the latest round of negotiations with a proposal which includes a bonus of about $34,000 per worker.
Failure to reach a labour deal at the mine during last year’s wage talks led to a 44-day strike, which resulted in a near 8 percent drop in annual output from Escondida.
ABN Amro analyst Casper Burgering said this year’s talks were sharpening investor appetite for copper.
“Negotiations are not that easy, and investors are thinking it will take some time before they get a settlement,” he said. “In that case, supply of copper will be hurt.
“Looking at the fundamentals, they are still quite sound,” he added. “We have not come across any shortages yet, but I think demand, especially from China, will remain sound … copper has quite a good case for staying above $7,000.”
* COPPER PRICES: Three-month copper on the London Metal Exchange closed up 1.8 percent at $7,099 a tonne, after rising to $7,103 a tonne, its highest since April 19, earlier in the session.
* TECHNICALS: As copper returns to the $7,016 level, a break above a falling trendline confirms a bullish wedge that suggests a higher target around $7,112, Reuters technical analyst Wang Tao said.
* LEAD: LME lead hit a more than three-month high at $2,528 a tonne, tracking a 4 percent rally in Shanghai prices to a 19-month peak after the government in China’s northern province of Hebei announced environmental inspections on the acid industry. Lead ended at $2,516 a tonne, up 0.3 percent.
* RUSAL: The LME is working to see if it can expand access to Rusal’s aluminium, which is under suspension due to U.S. sanctions, but the exchange needs to be cautious, Chief Executive Matthew Chamberlain said on Tuesday.
* ALUMINIUM PRICES: LME aluminium finished at $2,310 a tonne, down 0.2 percent.
* ALUMINIUM STOCKS: Aluminium inventories held in London Metal Exchange-registered warehouses fell by another 7,050 tonnes, data showed on Tuesday, taking them to their lowest since early February at 1.192 million tonnes.
* OTHER METALS: LME zinc ended the day up 2.5 percent at $3,199.50 a tonne, while nickel closed at $15,750 a tonne, up 1.7 percent, and tin finished 0.4 percent higher at $20,650.
Source: Brecorder
