COPPER - AWAITS STRIKE NEWSLONG ON TKO
Reuters
LME copper steady in Asia, awaits strike news
Thursday July 1, 12:26 am ET
SINGAPORE, July 1 (Reuters) - Threatened strikes at major copper production facilities in the United States and Chile helped copper futures retain most of their recent gains during sparse Asian trading on Thursday.
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Copper (MCU3) for three-month delivery on the London Metal Exchange (LME) hovered around $2,650 a tonne, the level at which it closed in London on Wednesday after leaping 2.5 percent.
By 0415 GMT, the metal was trading at $2,645/$2,650 a tonne. It touched $2,662/$2,665 earlier in the morning.
"The business I was doing yesterday was related to physical transactions," a futures trader in Sydney said, but he added that the possible strikes had now been factored into the market.
Asarco, the U.S. unit of Grupo Mexico (Mexico:GMEXICOB.MX - News), the world's third-largest copper producer, is currently locked in last-ditch contract talks with union officials, after workers voted to strike unless wages are raised.
Union workers at the Collahuasi mine in Chile, jointly controlled by Falconbridge Ltd (Toronto:FL.TO - News) and Anglo-American Plc (London:AAL.L - News; AGLJ.J), on Tuesday rejected the company's final wage offer and could begin striking on Friday.
With global copper supplies tight, metals markets have kept a close watch this year on labour disputes at copper mines in North America and Chile, the world's biggest producer of the red metal.
Traders said copper prices would come down if the strikes were averted, or were quickly ended.
"Those people who wanted to go long before the strikes have now done so," another trader said.
Also factored into the market was the widely expected U.S. interest rate hike. The U.S. Federal Reserve on Wednesday raised rates for the first time in four years, by a quarter percentage point from a 46-year low of one percent.
Most Shanghai copper futures (0#SCF:) contracts rose strongly on Thursday morning, mirroring Wednesday's gains on the LME. Most-active October (SCFV4) copper was up 560 yuan to 25,640 yuan a tonne in the morning session.
COMEX copper (0#HG:) ended sharply up on Wednesday in New York on strike-related supply concerns. Most-active September copper (HGU4) regained most of its losses from the previous day, closing up 3.30 cents, or 2.8 percent, at $1.2080 a pound. It was a quiet morning elsewhere on the LME, with aluminium (MAL3) the only other metal traded by 0415 GMT. The three-month contract was at $1,717/$1,720 a tonne, a shade down from Wednesday's close of $1,721.50.
In thin trading, Shanghai aluminium (0#SAF:) rose modestly across the board. The most-active October contract (SAFV4) gained 70 yuan to 15,810 yuan a tonne.
Other LME metals were untraded. Lead (MPB3) was indicated at $835/$840 a tonne, after shooting up 5.95 percent on Wednesday. Zinc (MZN3) was steady, indicated at $990/$995.
Nickel (MNI3) was indicated at $15,000/$15,200 and tin (MSN3) at $8,700/$8,800. ($1=8.2766 yuan)
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