Copper price rises as looming strikes in Chile add to supply worries

Futures prices for copper metal for delivery in July was up 0.51%, at $4.52 ($9,944 per tonne) on Wednesday afternoon on the Comex market in New York.

A union representing workers at BHP Group’s Escondida and Spence copper mines has rejected the company’s contract offer, Reuters reported, and called on members to walk off the job starting Thursday. Escondida is the world’s largest copper mine.

The 205 workers run the global resources company’s Integrated Operations Center, which manages pits as well as cathode and concentrator plants in the north of Chile.

The threat of a strike comes as copper prices remain close to record highs.

Meanwhile, concerns over mining investment in South America linger as the leading presidential candidate in Peru wants to impose a similar royalty tax on copper sales proposed in Chile.

“Fundamentals remain supportive, with rising concerns over supply disruptions in South America due to labour negotiations and elections,” a Singapore-based copper analyst told Reuters.

“It (copper demand) is still weak but premiums might have hit a bottom. Previous pullback in prices also invited buying interest from end users’ restocking activities. Firm contango will also favour traders’ long and carry strategy.”

The dollar, wallowing near a five-month low against major peers on Wednesday, is making greenback-priced metals cheaper and more appealing to holders of other currencies.