Wednesday, June 22, 2022

Copper price rises as looming strike in Chile adds to supply worries

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

Image courtesy of Codelco. 

The copper price rose on Tuesday on concerns about an expected strike in top producer Chile.

Copper for delivery in July rose 1.1% from Monday’s settlement, touching $4.08 per pound ($9,484 per tonne) Tuesday morning on the Comex market in New York.

Click here for an interactive chart of copper prices

Workers at Chile’s state-owned Codelco will start a nationwide strike on Wednesday to protest the government’s and the company’s decision to close a troubled smelter, a union official said.

“We are going to start on Wednesday in the first shift,” Amador Pantoja, president of the Federation of Copper Workers (FTC), told Reuters on Monday.

Workers had threatened a national strike if the board of directors did not invest to upgrade a troubled smelter located in a saturated industrial zone in Chile’s central coast.

Instead, Codelco said on Friday that it would terminate its Ventanas smelter, which has been closed for maintenance and operational adjustments after a recent environmental incident sickened dozens in the region.

Related: Chile tax reform, mining royalty ‘priority number one,’ Minister says

The unionized workers insist Ventanas needs $53 million for capsules that retain gases and allow the smelter to operate under environmental compliance, which was dismissed by the government.

Meanwhile, China’s strict “zero-covid” policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered the country’s economy and manufacturing sector.

At 117,025 tonnes, copper stocks in LME-registered warehouses are down 35% since mid-May.

(With files from Reuters)

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