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Copper Rises to 16-Month High
on Chile Strike, Supply Concerns

By Millie Munshi and Anna Stablum

Dec. 31 (Bloomberg) -- Copper rose to the highest price in almost 16 months on concern that a miners’ strike may disrupt output in Chile, the world’s biggest producer.

Workers at state-owed Codelco’s Chuquicamata copper mine, the world’s second-largest, plan to strike on Jan. 4, union official Miguel Lopez said today after renewed contract talks broke down. The metal capped its biggest annual gain on record as demand climbed while supplies remained tight.

“Copper has the best outlook for next year,” said Eliane Tanner, a Credit Suisse Group AG analyst in Zurich. “It is suffering from supply-side constraints.”

Copper futures for March delivery advanced 0.15 cent to $3.3465 a pound on the New York Mercantile Exchange’s Comex unit. Earlier, the most-active contract touched $3.379, the highest price since Sept. 2, 2008.

The current contract for Chuquicamata miners ends today, union official Jamie Graz said. On Dec. 28, the workers voted to strike after rejecting a 3.8 percent pay increase offered by Codelco. The union sought 5 percent on Dec. 23.

Copper has more than doubled this year. Expectations of revived global economic growth helped boost prices along with a decline in the dollar. The metal was also pushed higher by record first-half imports to China, the world’s largest user.

“Next year, we can expect copper to move higher,” said Matthew Zeman, a LaSalle Futures Group trader in Chicago. “The global economic picture is looking up, and people are optimistic about the prospects for demand.”

The price may reach $3.50 in the “next couple of weeks,” Zeman said. Copper almost quadrupled this decade, with the most- active contract setting a record at $4.2605 on May 5, 2008, as consumption rose in emerging economies including China and India.

On the London Metal Exchange, copper for three-month delivery rose $45, or 0.6 percent, to $7,375 a ton ($3.35 a pound). Among other metals for three-month delivery, zinc, lead and tin prices rose. Nickel and aluminum fell.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aICAo27kVhfU