Last Updated: June 20, 2007 05:48 EDT
Copper Rises as Strike Threat Looms; Lead Advances to Record
By Brett Foley
June 20 (Bloomberg) -- Copper rose in London as stockpiles fell and on
speculation that strikes will disrupt production at operations in Peru and
Chile that account for at least 5 percent of global supply. Lead jumped to a
record and nickel climbed.
Workers at Codelco, the biggest copper company, Chile's Collahuasi mine and
Southern
Copper Corp.'s Peruvian operations have threatened to strike over pay
demands. Inventories tracked by the London Metal Exchange fell for the 23rd
consecutive day, the exchange said today in a daily report.
``If there is a strike, even for a short period, it will make a big
difference because a lot of copper will come out of the market,'' Michael
Jansen, a London-based analyst at JPMorgan Securities Ltd., said in an
interview. ``The market is right to be focusing on it.''
Copper for delivery in three months on the LME gained $100, or 1.4 percent,
to $7,525 a metric ton as of 10:37 a.m. local time. The metal used in power
cables slipped 1.5 percent yesterday. It traded at an 11-month high of $8,335
on May 4.
LME inventories dropped 750 tons, or 0.7 percent, to 114,200 tons, the
exchange said. Stockpiles have fallen 38 percent this year and are at the
lowest since Oct. 23.
Codelco contract workers pushed back the start date of a planned strike by at
least one day to June 21, Cristian Cuevas, president of the Confederation of
Copper Workers, said June 18.
At Dona Ines de Collahuasi, Chile's third-largest copper mine, Hernan Farias,
president of a labor union, said yesterday that workers are preparing a strike
vote next week after wage negotiations stalled with management.
Stainless-Steel Cuts
In Peru, unions at Southern Copper, the world's fifth- largest producer,
failed to reach an agreement during wage negotiations to avert a threatened
strike. Unions have said they plan to strike June 23.
Collahuasi, owned by Xstrata Plc and Anglo American Plc, and Southern
Copper's Peru mines account for more than 700,000 tons of metal output a year,
or about 5 percent of global supply, JPMorgan's Jansen said.
Lead gained $48 to $2,448 a ton. Earlier it traded at $2,448 a ton, beating
the previous record set on June 18 by $18.
Nickel gained $1,250 to $38,750 a ton. Yesterday, the metal fell 7.2 percent,
its biggest decline in more than nine months, on speculation stainless-steel
makers will expand their use of alternative raw materials to cut costs.
China may produce less stainless steel than expected this year after Shanxi
Taigang Stainless Steel Co., the nation's biggest producer, and other mills
agreed to cut supply by 20 percent from July 1, Taigang's President Chai
Zhiyong said today.
Other producers such as Finland's Outokumpu Oyj, Germany's ThyssenKrupp AG
and
South Korea's Posco have said they will cut nickel use this year. More than
two-thirds of nickel is used in stainless-steel production.
Among other LME-traded metals, aluminum increased $12 to $2,718 a ton and
zinc gained $55 to $3,665. Tin declined $50 to $14,100.
To contact the reporter on this story: Brett Foley in London at [EMAIL
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