Comex copper settled up sharply on Wednesday, nearly recouping on Tuesdays steep loss, as supply worries sparked fund buying after news that copper workers at Chillies Collahuasi mine and US Asarco operation voted in favour of strikes, traders said.
"You had some serious fund buying overnight, and that transferred into some good buying here at the said Pioneer Futures analyst Scott Meyers.
Comex benchmark September copper settled up 3.30 cents, or 2.8 percent, at $1.2080 a lb, after trading from $1.1740 to $1.2170. That almost erased on Tuesday's 3.55-cent fall.
Spot July rose 3.35 cents to $1.2050 on its first notice day, while back months gained 1.55 to 3.35 cents.
Labour negotiations have attracted the attention of copper traders amid dwindling supplies of refined copper and consistent demand, dealers said. "The strike (votes) jacked up copper. Its all-around buying," said one New York desk trader.
On Tuesday, Chilean workers at Collahuasi, jointly controlled by Falconbridge Ltd and Anglo American Plc, voted to reject the company's wage offer, paving the way for a strike to begin on July 2.
However, the union and management resumed talks on Wednesday and they could continue through on Thursday. And on Wednesday, union workers at Asarco, the US unit of Mexican copper giant Group Mexico, voted for a strike.
The union is negotiating a new contract to replace a 2001 pact that expires at midnight today.
Asarco facilities include the Mission and Silver Bell mines the Amarillo refinery and the Hoyden and El Paso smelters.
Pioneers Meyers said the copper price looked as though it completed its recent correction lower and the charts seemed positive again.
He pegged first key resistance in Comex September futures at $1.2250 with support in the area of $1.165 to $1.17.
"We've been working our way back up into a good level," Meyers said, adding, "The stock market also looks steady. And I dont think today's interest rate picture is going to mean too much."
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