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The rest of the complex was down in the early session on Tuesday, with disappointing Chinese economic data released on Monday and persistent concerns over global trade tensions denting sentiment in the base metals sector.
China’s gross domestic product reading for the second quarter came in 0.1% lower than the prior quarter, with the slowdown in Chinese economy stoking fears of reduced metal demand.
Copper bucked the general weakness, however, with the red metal benefiting from concerns over potential supply disruptions stemming from ongoing labor negotiations at the world’s largest copper mine, Escondida.
The most-traded September copper contract on the SHFE traded at 49,040 yuan ($7,331) per tonne as at 11.22am Shanghai time, rising 320 yuan per tonne or 0.7% from Monday’s close.
“Copper has been holding up relatively well, as the possibility of supply disruption in Chile was back in the headlines,” ANZ Research noted on Tuesday.
“Months of labor negotiations between union workers and BHP’s management at Chile’s Escondida copper mine has failed to reach an amicable agreement and the possibility of an all-out strike looms,” Metal Bulletin analyst Andy Farida said.
BHP’s latest offer was rejected as it excludes two of the miners’ main demands: a 5% salary increase and a one-time bonus equivalent to a 4% dividends distributed to shareholders.
“A strike at Escondida could well be the catalyst needed for the LME copper price to recover,” Farida added.
Moreover, discussions continue at the Mount Polley copper mine in Canada in attempt to resolve a near two-month strike.
Aluminium was similarly higher this morning, with its most-traded September on the SHFE trading at 14,075 yuan per tonne as at 11.22am Shanghai time, up 75 yuan per tonne from Monday’s close.
Ongoing trade disruptions due to the United States’ sanctions on Rusal and tariffs on Russian metal continue to support light metal prices, according to ANZ Research.
Base metals prices
Currency moves and data releases