Copper price hits 2-yr peak on Chile strike fears [UPDATED]

Copper futures in London and Shanghai soared in early morning trading on Monday July 13 after miners in Chile declared they would strike over wages, Fastmarkets understands.

July 13, 2020

By Archie Hunter

Unionized workers at Antofagasta’s Zaldivar mine voted to strike – scheduled for Wednesday July 15 – with 99% of members rejecting a pay offer, Reuters reported. As per Chilean law, the government must mediate between the parties before a strike can be made legal.

Zaldivar produced 54,000 tonnes of SX-EW copper cathodes in 2019, Antofagasta’s website said, less than 2% of Chile’s annual output, which is the world’s leading producing country for copper.

The London Metal Exchange 3-month copper contract traded over $6,600 per tonne on Monday, the highest its been since July 2018 and up by 3% on Friday’s market close, before declining to $6,575 per tonne.

In China, the Shanghai Futures Exchange active copper contract rose to 53,510 yuan ($7,643) per tonne on Monday, and also at a peak last reached in June 2018.

“A good arbitrage this morning caused premiums to trade over $100 per tonne, though they declined in the afternoon,” a Shanghai copper trader told Fastmarkets.

“Copper looks a little stretched,” Fastmarkets analyst Boris Mikanikrezai said.