BLBG:Copper Climbs for a First Day in Five as Strike Continues at Biggest Mine
Copper rose in London for the first day in five as a strike at the world’s biggest mine fueled speculation supply will fall short of demand.
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 production so far, said Roberto Arriagada, a union director. Prices also gained as the dollar weakened.
The labor action “just adds to people’s already- preconceived idea that there is a tightness in supply,” said Jaspar Crawley, a broker at Triland Metals Ltd., one of 12 companies on the floor of the London Metal Exchange.
Copper for three-month delivery advanced $135, or 1.4 percent, to $9,790 a ton by 9:38 a.m. on the LME. Copper for September delivery gained 1.1 percent to $4.456 a pound on the Comex in New York.
Full-time employees at Escondida are seeking better bonuses and benefits after copper prices more than tripled in two years through 2010. Workers at Santiago-based Codelco, the world’s biggest producer, held a 24-hour strike this month.
“Ongoing attempts by labor to get more of the copper pie will likely continue to keep supply growth relatively subdued this year,” Bart Melek, an analyst at TD Securities in Toronto, said in a report dated yesterday.
Escondida Production
Copper production from mines may be as much as 100,000 tons below expected levels this year, according to Melek. Escondida’s output dropped 8 percent from a year earlier in the 12 months through June, BHP said last week. World usage of copper is set to exceed production by 377,000 tons this year, according to the International Copper Study Group.
Constrained mine supply is among reasons copper will likely head for $5 a pound in coming months, Macquarie Group Ltd. said in a report yesterday. Prices reached a record $4.6575 in February.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.7 percent. A weaker dollar makes metals priced in the currency cheaper in terms of other monies.
Zinc for three-month delivery on the LME rose 1.9 percent to $2,516 a ton after reaching $2,518, the highest price since April 12. Orders to draw the metal from LME warehouses climbed to 107,550 tons, the highest level since April 2006. Orders climbed in Malaysia and have more than doubled this month overall.
Aluminum rose 0.9 percent to $2,643 a ton and nickel advanced 1.3 percent to $24,120 a ton. Lead climbed 1.6 percent to $2,718 a ton and tin added 1.1 percent to $28,450 a ton.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
