Copper May Gain in London After Miners Start Strike in Chile
2006-01-05 05:02 (New York)
By Simon Casey
Jan. 5 (Bloomberg) -- Copper may rise for a third
consecutive day in London on speculation that a strike by
thousands of workers at Codelco, the world's largest producer of
the metal, will reduce supply.
Contract workers at the Chilean state-owned copper producer
walked off the job yesterday after the government rejected
demands for a 500,000 peso ($971) bonus for each employee. The
company's executive president, Juan Villarzu, said yesterday he
doesn't expect any immediate impact on production. Codelco last
year accounted for about 10 percent of world supply.
``Any news that's positive is being seized upon by the
bulls,'' said Maqsood Ahmed, an analyst in London at Calyon
Global Trading, one of the 11 companies that trade on the floor
of the London Metal Exchange, in an interview today.
Copper for delivery in three months on the LME was
unchanged at $4,540 a metric ton as of 9:45 a.m. London time,
after earlier rising as much as $10. The metal, used to make
wiring and plumbing, traded at a record $4,576 yesterday.
Any disruption to output in Chile may create a shortfall in
global production. Supply and demand will be closely matched
this year, Goldman Sachs Group Inc. said in a Dec. 15 report.
Demand will grow 1.7 percent and will exceed supply from mines
and recycled scrap by 5,000 tons, Goldman said.
There was a deficit of 140,000 tons last year, when prices
rallied 40 percent.
Pay Demand
Codelco has 28,000 workers at its mines employed by outside
contractors. They are paid wages that are lower than those of
company employees, according to protest leader Danilo Jorquera.
The strikers want a bonus because of copper's price gains.
Copper inventory tracked by the LME rose 0.9 percent to
97,050 tons, the exchange said today in a daily report, the
highest in 14 months.
Metals have risen this week on buying from speculative
investors. Some of that demand is coming from pension funds,
which are putting more money into funds that track commodities.
``It does feel and taste like it's index money'' pushing
prices higher, Ahmed said.
The Reuters Jefferies CRB Index of 19 commodities yesterday
added 2.12, or 0.6 percent, to a record 338.49. The index
climbed 17 percent in 2005, while the Standard & Poor's 500
Index of U.S. shares rose 3 percent.
Funds tracking such indexes will double in value to $140
billion over the next four years, Benno Meier, vice president of
investor product sales at Morgan Stanley, said at a London
conference on Nov. 29.
Among other metals for delivery in three months on the LME,
aluminum rose $9 to $2,314 a ton. Yesterday, the lightweight
metal traded at a 17-year high of $2,329.
Zinc advanced $4 to $1,954, lead gained $2 to $1,102,
nickel declined $10 to $14,090 and tin was $50 lower at $6,650.
--With reporting by Heather Walsh in Santiago. Editor: Wallace,
(jwc). |
