Traders work on the floor of the London Metal Exchange, on Sept. 27, 2018.SIMON DAWSON/Reuters
London copper prices advanced on Friday, on track for a weekly gain, after workers at two mines in top producer Chile went on strikes, raising supply disruption risks.
Three-month copper on the London Metal Exchange rose 0.4 per cent to $9,503 a tonne by 0725 GMT, up 0.4 per cent on a weekly basis.
The most-traded September copper contract on the Shanghai Futures Exchange closed down 0.4 per cent at 69,970 yuan ($10,800.84) a tonne.
On Thursday, two unions at Codelco’s Andina copper mine walked off the job after rejecting the latest contract offer, while workers at JX Nippon Copper’s Caserones mine also went on a strike after labour contract talks collapsed.
“The copper and aluminum markets have been tightened by supply constraints in Chile, Peru and China,” said Fitch Solutions in a note.
However, capping further gains in copper prices was news that workers at Chile’s sprawling Escondida copper mine, the world’s biggest, approved a new contract with management, avoiding a strike.
Slowing demand in China also dented outlook for base metals, but potential supply outages caused by renewed global COVID-19 outbreaks poses an upside risk to the sector, Fitch Solutions said.
FUNDAMENTALS
- LME aluminum rose 0.4 per cent to $2,593.50 a tonne, while nickel fell 0.3 per cent to $19,620 a tonne.
- ShFE aluminum edged up 0.1 per cent to 20,130 yuan a tonne, nickel increased 1.5 per cent to 146,810 yuan a tonne while zinc fell 1.5 per cent to 22,360 yuan a tonne and tin dropped 1.5 per cent to 238,440 yuan a tonne.
- Yangshan copper premium rose to $65 a tonne, its highest since March 23, indicating improving demand to import the metal into China.
- The discount of LME cash copper on the three-month contract expanded to $31.75 a tonne, its biggest since July 20, indicating more nearby supply, as LME copper stocks surged 123 per cent from end-2020 to 235,775 tonnes.
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