Strikes at copper mines in the United States and Chile drove the price of the metal up 1 percent on Tuesday, as Asian investors covered positions amid fears supply disruptions could push prices still higher. Traders said they expected copper, trading at $3,262/$3,268 a tonne, to top $3,270 as workers hold separate strikes at Asarco's Mission and Silver Bell mines in Arizona and Placer Dome's Zaldivar mine in Chile.
"Asarco and also the strike in Chile: these are strong reasons for the copper market to go up," said a trader in Tokyo.
"We are seeing a bit of Chinese and Japanese buying." Strong demand for copper, used in construction and electronics, was reflected in rising prices in China, which consumes about a fifth of the world's supply of the metal.
The most-active September copper contract on the Shanghai Futures Exchange was up 650 yuan from Monday's settlement to 32,440 yuan a tonne.
Currently trading about 5 percent below a record price hit on June 20, copper for delivery in three months on the London Metal Exchange closed on Monday at $3,232 a tonne.
"If copper breaks $3,270, then $3,300 won't be too far away," the Tokyo trader added. Fears about supply woes come a day after traders were talking about a slight improvement in availability, as BHP Billion restarted operations at its Cerro Colorado mine in northern Chile, shut down on June 13 after an earthquake.
Group Mexico, owner of the Asarco mines, said on Monday the three-day-old strike, where 1,200 workers have walked out, might halve production, leading to a loss of 100,000 to 125,000 tonnes of contained copper on an annualised basis.
But Placer Dome said it would try to keep production at 75 percent to 80 percent of capacity. This year, the Zaldivar mine is slated to produce about 144,000 tonnes of copper.
But metals traders largely ignored currency moves. "The dollar movement is not a big factor. We will have to see how the dollar moves when the US market opens and more economic data is released," said one trader.
Aluminium traded at $1,701/$1,705 a tonne, compared with London's close of $1,697.
LME three-month nickel was trading at $14,050/$14,150 a tonne. On Monday, it closed at $14,100, having dropped more than 2.5 percent amid talk Chinese appetite for the metal had slowed and steel mills were de-stocking.
Zinc was at $1,192/$1,197 a tonne and lead was at $858/$862 a tonne. Three-month tin was at $7,200/$7,250 a tonne.
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