Copper bounced on Tuesday as worries about supplies from top producer Chile gathered pace, while concerns about Chinese demand and a firmer dollar tempered optimism for higher prices.
Benchmark copper CMCU3 on the London Metal Exchange was up 0.6% at $9,428 a tonne at 0915 GMT. Prices of the metal used in the power and construction industries fell to $9,369.50 a tonne on Monday, their lowest in 2-1/2 weeks.
“The potential for disruptions in Chile is creating some jitters, but the dollar is up and China growth is slowing,” a metals trader said.
CHILE: BHP BHP.AX and the workers union at its Escondida copper mine in Chile said late on Monday they would extend government-mediated contract talks by a day in a last-ditch effort to stave off a strike.
Escondida, the world’s biggest copper mine, accounts for about 4.5% of global copper supplies estimated at roughly 24 million tonnes this year.
Workers at JX Nippon Copper’s Caserones mine in Chile will walk off the job beginning on Tuesday after last-ditch talks over a collective labour contract collapsed. Caserones produced 126,972 tons of copper in 2020.
DATA: Clues to demand prospects for industrial metals will come from Chinese data over the next few days, including total social financing, loans, industrial production and investment.
China accounts for around half of global consumption of industrial metals.
DOLLAR: A higher U.S.-currency makes dollar-priced metals more expensive for holders of other currencies which could subdue demand. FRX/
SPREADS: Ample supplies of copper CMCU0-3 on the LME market are reflected in the discount for the cash over the three-month contract at around $27 a tonne on Tuesday.
Copper stocks in LME registered warehouses MCUSTX-TOTAL at 236,100 tonnes are more than double the level seen in the middle of May.
TECHNICALS: Copper faces strong upside resistance at the 50-day moving average currently at $9,545, and at $9,565 where the 100-day moving average currently sits.
OTHER METALS: Aluminium CMAL3 was up 0.8% at $2,570 a tonne, zinc CMZN3 rose 0.9% to $2,977, lead CMPB3 climbed 1.1% to $2,284, tin CMSN3 added 1.4% to $35,100 and nickel CMNI3 advanced 0.6% to $18,735.
Source: Reuters (Reporting by Pratima Desai Editing by Mark Potter)