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Copper boosted by planned labour strikes at Chile mines

PUBLISHED: Wed, 26 May 2021 17:40:32 GMT

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Copper prices gained on Wednesday as a planned labour strike at the world’s biggest copper mine in Chile threatened already low global supplies of the metal.

Benchmark copper on the London Metal Exchange (LME) were up 0.6% at $9,978.50 a tonne in official trading.

A union representing workers at BHP’s Escondida and Spence copper mines rejected the company’s contract offer and called on members to walk off the job from Thursday.

“If this strike at the Spence and Escondida mines happens, then it will be an issue for the market,” Roskill copper analyst Jonathan Barnes said.

He said other risks to supply in South America included uncertainty over the new constitution in Chile and mining royalties there and a lead in the Peru polls by a candidate who wants to implement new mining taxes and royalties.

“All of this adds up to the fact that mining companies will not invest because of the uncertainty and there won’t be any primary supply response at a time when the world is desperate for copper,” Barnes said.

DOLLAR: The dollar neared its weakest in five months, making dollar-denominated metals cheaper for holders of other currencies, which could boost demand.

CHINA PLAN: China’s banking regulator has asked lenders to stop selling investment products linked to commodities futures to mom-and-pop buyers to curb investment losses amid volatile commodity prices.

This comes after the Chinese government said it would crack down on the surging prices of industrial metals.

CONGO SUPPLY: The Kamoa-Kakula mine in Democratic Republic of Congo started producing copper concentrate on Tuesday, several months ahead of schedule, joint venture partners Ivanhoe Mines and Zijin Mining said.

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OTHER METALS: Aluminium gained 0.9% to $2,393.50 a tonne, zinc rose 0.5% to $2,998.50, lead added 1% to $2,180, tin advanced 1% to $29,775 and nickel climbed 0.9% to $17,198.

(Reporting by Zandi Shabalala; editing by Emelia Sithole-Matarise and Barbara Lewis)