US copper futures erased earlier gains, bobbing above and below the unchanged level in early trade on Wednesday, as the market looked to consolidate after two straight days of losses, traders said.
"We came off 4.00 cents, giving back all of our opening gains. I am not hearing anything behind it...I think it's just the fact that we couldn't find any follow-through through those levels. We'll probably work in a sideways to slightly higher range today," said one trader down on the floor of the exchange.
Most-active September copper rose 1.10 cents to $3.4105 a lb by 10:27 am EDT (1427 GMT) on the New York Mercantile Exchange's COMEX division, holding in the middle of its early $3.39 to $3.4470 trading range. Soon-to-be spot July copper was up 1.15 cents to $3.4060, backing away from an early peak at $3.45.
Copper futures volumes were estimated at 6,057 lots by 10:00 am Despite the market's early indecision, analysts continued to point to falling stocks levels and a slew of labour issues that could have the potential to significantly disrupt the market's supply chain.
"Production losses were substantial in both 2005 and 2006 due in part to strikes and the potential remains high that disruptions will continue to support high copper prices," noted Robin Bhar, base metals strategist with investment bank UBS.
"At risk is some 4.12 million tonnes of production capacity amounting to 21 percent of global copper supply," Bhar said. At the forefront was a potential strike across the five divisions of Chile's Codelco, the world's largest copper producer, after subcontract workers planned to meet in general assembly on Thursday to give the final go-ahead to strike.
Also in Chile, workers at Collahuasi, one of the world's largest copper mines, have set a strike vote for June 27, barring an improved wage offer from the company that could be voted on before then.
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