(Bloomberg) — Copper edged higher as a strike at a Chilean mine added to supply concerns, while a stronger dollar and broader pullback in risk assets kept gains in check.
Benchmark futures on the London Metal Exchange rose 0.4% at settle at $14,475.50 a metric ton Wednesday. Labor tensions in top producer Chile are adding to a series of mine disruptions that have tightened the outlook for supply.
Two unions at Antofagasta Plc’s Centinela mine began a strike Wednesday and said the walkout would start affecting copper output within about two weeks. While the operation has maintained feed to its processing plants, much of its mine movement and development has stopped, the unions said. Antofagasta earlier said projected production remained unchanged.
The dispute comes as supervisors at BHP Group’s Escondida, the world’s biggest copper mine, remain in government-mediated wage talks after voting for a walkout.
Copper’s gains were tempered by a stronger dollar and weakness across global markets. US stocks retreated from record highs while Treasury yields remained near their highest since 2002.
Traders are also assessing whether US stockpiling that helped fuel copper’s recent rally will persist. Washington has taken longer than expected to decide on possible tariffs on refined copper, while the premium of Comex futures over London prices has narrowed.
“We are more neutral on LME copper given its recent catch-up to Comex,” Morgan Stanley analyst Amy Gower said. “Any slowdown in US stockpiling could make the market feel looser.”
Still, China’s demand has been resilient and mine supply is facing significant disruptions, she said.
Attention now turns to China’s reopening Thursday after a weeklong holiday, which should provide fresh signals on demand from the world’s biggest metals consumer.
Among other LME metals, aluminum fell 0.5%, lead rose 1.3%, nickel gained 0.3% and tin edged 0.2% higher.
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