Copper price hits 2-yr peak on Chile strike fears [UPDATED]

Unionized workers at Antofagasta’s Zaldivar mine voted to strike – scheduled for Wednesday July 15 – with 99% of members rejecting a pay offer, Reuters reported. As per Chilean law, the government must mediate between the parties before a strike can be made legal.

Zaldivar produced 54,000 tonnes of SX-EW copper cathodes in 2019, Antofagasta’s website said, less than 2% of Chile’s annual output, which is the world’s leading producing country for copper.

The London Metal Exchange 3-month copper contract traded over $6,600 per tonne on Monday, the highest its been since July 2018 and up by 3% on Friday’s market close, before declining to $6,575 per tonne.

In China, the Shanghai Futures Exchange active copper contract rose to 53,510 yuan ($7,643) per tonne on Monday, and also at a peak last reached in June 2018. 

“A good arbitrage this morning caused premiums to trade over $100 per tonne, though they declined in the afternoon,” a Shanghai copper trader told Fastmarkets.

“Copper looks a little stretched,” Fastmarkets analyst Boris Mikanikrezai said.