Copper Is Little Changed in New York Before Possible Strikes
By Millie Munshi
June 20 (Bloomberg) -- Copper futures were little changed in New York as planned strikes in Chile and Peru threatened to disrupt supplies.
Contract workers at Chile's Codelco, the world's largest copper producer, may strike tomorrow to seek higher pay, and three unions at Southern Copper Corp.'s Peruvian operations plan to walk out June 23. Demand for copper exceeded production by 176,000 metric tons in the first four months of the year, the World Bureau of Metals Statistics said today.
``Prices are going to be volatile until we get a better sense of how much production will be lost because of the strikes,'' Donald Selkin, director of equity research at Joseph Stevens & Co. in New York, said. Copper, used to make pipes and wires, has gained 19 percent this year.
Copper futures for September delivery were up 0.2 cent to $3.4015 a pound at 11:26 a.m. on the Comex division of the New York Mercantile Exchange. They earlier rose as much as 1.4 percent. The price reached a record $4.04 a pound in May 2006, partly because of labor unrest.
Workers at Dona Ines de Collahuasi, Chile's third-largest copper mine, are preparing for a strike vote next week after owners Xstrata Plc and Anglo American Plc refused to sweeten a wage offer, a union leader said today. A strike already has disrupted deliveries at Zug, Switzerland-based Xstrata's refinery in Montreal.
`Every Ton Counts'
``The copper market is really in a situation where every ton counts,'' David Moore, a commodities strategist at Commonwealth Bank of Australia in Sydney, said in an interview.
Copper inventories monitored by the London Metal Exchange have plunged 38 percent this year to 114,200 metric tons, the lowest since Oct. 23.
``The continuing drawdown in stockpiles is a sign of the underlying supply restrictions,'' Selkin said.
On the London Metal Exchange, copper for delivery in three months rose $55, or 0.7 percent, to $7,480 a metric ton ($3.40 a pound). The metal has gained 11 percent in the last year.
A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.
MRX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
