Mine strike supports copper, offsets pressure from firmer dollar
XLB•Copper rose 0.1% to $14,424 a metric ton after workers at Chile’s Centinela mine began a strike, adding to supply concerns. A stronger dollar pressured metals, while LME copper inventories have fallen 36% since early June and SHFE-linked stocks have dropped 79%.
1. Strike lifts copper
Copper prices recovered on Wednesday as a walk-out by workers at Chile’s Centinela mine offset pressure from a stronger dollar. The benchmark three-month copper contract on the London Metal Exchange edged up 0.1% to $14,424 a metric ton by 1430 GMT, after trading lower earlier. The strike followed a breakdown in talks between two unions and Antofagasta Minerals.
2. Inventories under pressure
An RBC analyst said tight copper inventories outside the United States may give the strike a larger-than-normal effect on prices. LME copper has gained 16% this year, while LME-registered inventories have fallen 36% since early June and stocks in storage facilities linked to the Shanghai Futures Exchange have dropped 79%. A commodity strategist at WisdomTree said demand remained robust, citing China’s electrification.
3. Dollar weighs on metals
The dollar index climbed as investors awaited signals on potential rate hikes, weighing on dollar-denominated industrial metals. Aluminium fell 0.9% to $3,106 a ton, zinc dropped 0.7% to $3,740, and tin was flat at $54,185. Lead rose 0.7% to $1,885.50 and nickel added 0.1% to $15,700.
