Copper supplies tightening more? More copper mine strikes may be coming in Canada and Peru. Here's an article from Mining Weekly:
Copper may rise next week on speculation that labor unrest that has cut production at the world's largest mine may spread, further disrupting supply.
A strike over pay at Chile's Escondida, which last year supplied 8,5% of the world's copper, is in its fifth day and has slashed output. Wage negotiations are scheduled at other mines in Canada and Peru. Production has also been lost after a July 23 rockslide at Chile's Chuquicamata mine, run by state- owned Codelco.
“Production is down, and continues to decline,'' said Stuart Flerlage, managing principal at NuWave Investment Corp. in New York. “With strikes in South America pending and the world's two largest mines struggling, this will continue to keep copper prices bid'' higher.
Twelve of 16 analysts, investors, traders and consumers surveyed Aug. 9 and yesterday by Bloomberg News said copper will rise. Four said it will drop.
Strikes and other disruptions have resulted in production lagging behind demand this year. The shortfall, estimated at 200 000 metric tons by UBS AG last month, pushed copper to a record in May. The metal has gained 81% this year.
Copper for delivery in three months rose $95, or 1,l2%, to $7,970 a metric ton as of 7:30 a.m. on the London Metal Exchange. It traded at a record $8 800 on May 11.
Copper for September delivery on the Comex division of the New York Mercantile Exchange gained 0,5% to $3,64 a pound. Copper for delivery in October fell as much as 1730 yuan, 2.5%, to 68 220 yuan ($8 556) a ton on the Shanghai Futures Exchange. Chinese prices include 17% tax and a 2% duty.
Workers at Escondida, owned by Melbourne-based BHP Billiton, are seeking a larger slice of the company's record earnings. BHP Billiton, which reports full-year earnings on Aug. 23, said in February first-half net income soared 48% to $4 36-billion.
Workers want salary increases of 13 percentage points above inflation and a bonus of 16-million pesos ($29 350) each.
Chilean annual inflation was 3,8% in July. BHP Billiton has offered a raise 3 percentage points above inflation and a bonus of 8,5-million pesos a head.
Production at the mine has fallen by about 60%since the strike started, BHP Billiton said. The union said output is down about 80%.
Strikes at the Cananea and La Caridad mines, which are controlled by Grupo Mexico SA, also reduced supply this year.
More wage negotiations are scheduled at Teck Cominco Ltd.'s Highland Valley mine in Canada. The management at Antamina, a Peruvian mine owned by BHP Billiton and Canada's Falconbridge Ltd., is talking with workers, and Codelco is due to negotiate with employees later this year.
Codelco, the world's biggest copper miner, will need about three months to make repairs following the rockslide at Chuquicamata. The mine is losing about 576 tons a day of output.
Copper may also gain on speculation the US economy will continue to grow at a steady pace after the US Federal Reserve on Aug. 8 kept the overnight interest rate target between banks unchanged at 5,25%, following 17 consecutive increases.
The dollar has lost about 8% against the euro on speculation the Fed is nearing the end of its cycle of rate increases. A weaker dollar means it's cheaper to buy metals, which are traded in the currency.
“It's all looking bullish: the Fed pausing, the dollar under pressure, demand pretty good, Chuquicamata still affected by the recent rockfall,'' said Andy Cole, a London-based analyst at Metal Bulletin Research. “What more could the bulls ask for?''
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