Copper Rises in London Trading as Peruvian Miners Plan Strike
By Chanyaporn Chanjaroen
Oct. 1 (Bloomberg) -- Copper rose in London, extending a three-week rally, on concern that a strike planned for tomorrow at Southern Copper Corp., the world's fifth-largest producer, will curb output. Aluminum and nickel declined.
Peruvian workers at Southern Copper will stop work to demand higher wages, joining colleagues at three of the company's mines in Mexico who have been on strike since July 30. Output disruptions from Asia to South America contributed to a 28 percent gain in copper this year.
``The most important thing to watch this week is a strike in Peru,'' Dan Smith, an analyst at Standard Chartered Bank in London, said today by phone. ``It may slow down production growth.''
Copper for delivery in three months added $40, or 0.5 percent, to $8,060 a ton on the London Metal Exchange as of 1:52 p.m. The contract traded at $8,155 a ton Sept. 28, the highest intraday price since July 23.
Copper, used in wires and pipes, has risen this year as miners struggle to cope with higher demand from China, the world's largest user of the metal. Companies including BHP Billiton Ltd., the world's largest miner, will spend as much as $66 billion to increase production of the metal by 2015, Credit Suisse Group estimated last month.
At least 38 mining unions in Peru, the world's third-largest copper miner, decided to begin a national strike on Nov. 5 to pressure for rights for subcontracted workers, according to Mining Federation spokesman Cirilo Yarihuaman.
Copper may decline this week or next after gaining for three consecutive weeks, Smith said.
`Very Attractive'
Copper, as well as oil, iron ore and coal, is ``very attractive'' because demand outstrips supply, BHP Billiton Chief Executive Officer Marius Kloppers said in an interview with the Financial Times published Sept. 30.
Hedge-fund managers and other large speculators moved to a net-long position, or bet prices will rise, on copper futures traded in New York in the week ended Sept. 25. That was for the first time since March 2006, according to the latest report by the U.S. Commodity Futures Trading Commission.
Long positions outnumbered shorts by 78 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said Sept. 28.
Aluminum stockpiles tracked by the LME dropped for a third consecutive session, falling 1,225 tons to 937,400 tons. The benchmark three-month contract fell $17 to $2,503 a ton.
Posco, Asia's third-biggest steelmaker, will increase its stainless-steel product prices by as much as 8.6 percent from Oct. 15, Ko Min Jin, a spokeswoman for the Pohang, South Korea- based company said today by phone. The company had cut prices four times this year as some customers deferred orders on expectations lower nickel prices would drive down product prices.
`Healthier Demand'
A continued increase in stainless-steel prices will signal ``a healthier demand'' and push nickel prices higher, Michael Jansen, an analyst at JPMorgan Securities Ltd. in London, wrote today in a report.
Nickel dropped $200, or 0.7 percent, to $30,300 a ton.
Lead fell $10 to $3,370 and tin declined $25 to $15,350 a ton. Zinc increased $5 to $3,055. |
