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The most-traded January copper contract on the SHFE stood at 54,090 yuan ($8,210) per tonne as of 10.32am Shanghai time, up by 240 yuan from the previous session’s close.
Copper prices continue to be supported by news of strike action in Peru and Chile.
“Copper moving up [was] supported to a degree by news from Chile of short-term strike action at BHP’s La Escondida mine in reaction to staff layoffs. There is also ongoing strike action at Southern Peru Copper Corp over pay and benefits,” Sucden Financial said late on Thursday.
Escondida copper mine has laid off about 120 workers, a decision that led to union workers beginning a 24-hour strike on Thursday in protest.
The industrial action has resulted in “the total suspension” of the mine’s operations, Union No.1 said.
“This decision, lacking real and legitimate reasons, is adopted by the company in a post-negotiation scenario and a little over seven months ahead of starting a new negotiation, which allows [one] to attribute to it a character of retaliation and intimidation towards the workers,” the union added.
The strike at Southern Copper mines in Peru continued as no agreement has been reached between union and management, but production is reportedly unaffected.
“These strikes were compounded by another fall in inventories,” ANZ Research said on Friday.
Copper stocks on the London Metal Exchange declined a net 7,200 tonnes to 219,075 tonnes on Thursday.
Meanwhile the rest of the base metals complex was broadly higher, benefiting from a weaker dollar in the aftermath of the US Federal Reserve’s (Fed) more dovish than expected November meeting minutes.
The minutes from the Fed’s November meeting said that some officials were reluctant to vote for additional rate increases until they are convinced that inflation is indeed gaining strength.
These officials “indicated that their decision about whether to increase the target range in the near term would depend importantly on whether the upcoming economic data boosted their confidence that inflation was headed toward the committee’s objective.”
Market participants widely viewed the comments about low inflation as reducing the number of anticipated US interest rate increases next year, sending the dollar lower.
The dollar index was at 93.14 as of 11.09am Shanghai time – the index had reached a low of 93.07 on Thursday, which was the lowest since October 19.
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