Copper Eases as Striking Miners Return to Negotiations
15 February 2017 - 10:31PM
Dow Jones News
By Katherine Dunn
LONDON--Copper prices pulled back Wednesday, ahead of renewed
talks between striking workers and management at the world's
largest copper mine.
The three-month London Metal Exchange copper price was down
0.21% at $6,034.50 a metric ton in midmorning trade, continuing a
decline from 20-month highs reached on Monday.
Union workers at Chile's Escondida mine in the Atacama Desert
said they would begin talking with management on Wednesday, after
five days of striking. The mine is majority-owned by BHP Billiton
Ltd.
The union went on strike last Thursday over what they said were
plans to cut worker benefits after government mediation between the
two parties broke down.
"A quick resolution would most likely put some pressure on
copper prices, with the market expecting a lengthy strike," ING
said in a morning commodities note. Copper is up 4% so far this
week.
The next day or two should give an indication of whether the
strike is going to be a longer strike or over within a few days,
said Robin Bhar, an analyst at Société Générale.
"I would put the odds at no better or worse than 50/50," Mr.
Bhar said.
A stronger dollar was also weighing on the metal on Wednesday,
after Federal Reserve Chairwoman Janet Yellen raised expectations
for a rate increase next month. The WSJ Dollar Index was up 0.18%
on Wednesday. A stronger dollar makes dollar-denominated
commodities more expensive for buyers who hold other
currencies.
The union talks come amid a supply pinch, after Freeport-McMoRan
Inc. said it had stopped production at its Grasberg mine in
Indonesia because it had not yet received an export license for the
mine, following new regulations for exports introduced by the
government in mid-January.
Nickel rose to a 10-week high on Wednesday after the Philippines
Department of Environment and Natural Resources said Tuesday that
it planned to cancel 75 contracts with mining companies because of
environmental concerns. However, those projects aren't yet
producing nickel, so the cancellations are more likely to affect
long-term production and prevent new mining projects.
Nickel prices were up 0.42% at $10,835 per metric ton on
Wednesday.
The other base metals were mixed. Aluminum was up 0.32% at
$1,892 per ton, lead was down 0.27% at $2,358.50 per ton, zinc was
down 0.50% at $2,885 per ton and tin was up 0.88% at $19,965 per
ton.
Ryan Dube
and Cris Larano contributed to this article.
Write to Katherine Dunn at Katherine.Dunn@wsj.com
(END) Dow Jones Newswires
February 15, 2017 06:16 ET (11:16 GMT)
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