BLBG: Copper Gains as Strike Enters Fifth Day at Escondida, World’s Biggest Mine
Copper rose to a one-week high in New York on speculation that a strike at the world’s biggest mine may worsen a global supply shortage.
A strike at BHP Billiton Ltd.’s Escondida mine entered a fifth day as Chilean labor authorities prepared to mediate talks between union and company officials. The stoppage has cost about 12,000 metric tons in lost output, said Roberto Arriagada, a union director. World consumption is set to exceed production by 377,000 tons this year, the International Copper Study Group forecasts.
The strike “just adds to people’s already-preconceived idea that there is a tightness in supply,” Jaspar Crawley, a broker at Triland Metals Ltd., one of 12 companies on the floor of the London Metal Exchange, said today in a telephone interview.
Copper futures for September delivery gained 6.25 cents, or 1.4 percent, to $4.469 a pound at 10:36 a.m. on the Comex in New York. Earlier, the price reached $4.485, the highest for a most- active contract since July 19.
Before today, the metal gained 38 percent in the past year, reaching a record $4.6575 on Feb. 15, as mining companies struggled to keep pace with rising consumption.
“In addition to the strike, copper is mostly benefiting from a weaker dollar,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. The weakness in the greenback “makes it cheaper for foreign buyers to buy dollar-denominated assets,” he said.
The dollar declined against all of its major counterparts, falling to the lowest level since June 7 against a six-currency basket, as U.S. politicians struggled to reach agreement on raising the debt limit and reducing the deficit.
On the London Metal Exchange, copper for delivery in three months added $159, or 1.6 percent, to $9,814 a metric ton ($4.45 a pound).
Aluminum, lead, nickel, tin and zinc also gained in London.
To contact the reporters on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net; Yi Tian in New York at ytian8@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
