US copper futures finished on Thursday with strong gains, adding to a day-earlier rally amid continued fund buying as the widespread strike at Mexico's mines and refineries entered its third day, traders said.
A strike at huge mines and refineries in Mexico triggered a spectacular rally on Wednesday that continued to draw buyers in the market on Thursday, traders said. A breach of technical resistance levels set off stop-loss buy orders that sent copper to three-week highs by session end.
"It was a good move today. It gapped higher and it held well and settled well. There was a double top around $2.2670 (per lb), it settled just above that. So it's somewhat bullish," said Scott Meyers, senior trading analyst at Pioneer Futures in New York.
Copper for May delivery finished 3.20 cents higher at $2.2675 a lb on the New York Mercantile Exchange's COMEX division, building on sizable day-earlier gains. Thursday's action set a higher range between $2.2180 and $2.2730 a lb.
Spot March climbed 3.20 cents to end at $2.2755 a lb, also setting a higher band between $2.2315 and $2.2780. The all-time high for spot copper was $2.34 a lb on February 6. Final copper volume was estimated at 23,000 lots compared with 13,232 lots on Wednesday.
Action picked up late in the session, driving copper up another 1.50 cents on the day as technical levels were surpassed in the London and New York markets.
"There is room to a $2.2750 low, which fills the gap and $2.2730 (a lb on March copper) was the high. So I think we're going to shoot for that at least with an outside chance at $2.2950. I like the chart. I think it's a strong pattern," said Pioneer's Meyers.
Copper extended its highs on news that the thousands of Mexican miners and metal workers remained on strike in two separate disputes that crippled output at the country's biggest mines.
Grupo Mexico, the world's No 3 copper producer, said its two huge copper mines, La Caridad and Cananea, were closed for the third consecutive day on Thursday as workers complained of unsafe conditions.
Copper workers struck after 65 workers were killed last week in an explosion at a Mexican coal mine.
The two mines produced nearly 320,000 tonnes of copper last year. Buyers overlooked a US report that showed the number of Americans filing new claims for unemployment benefits rose by a larger-than-expected 15,000 last week.
Copper purchasers also ignored the big jump in inventory gains for the second straight day. London Metal Exchange copper warehouse stocks rose by 3,100 tonnes to 118,375 tonnes on Thursday. COMEX copper warehouse stocks fell by 605 short tons to 30,421 tons on Wednesday.
London Metal Exchange three-months copper closed the evening kerb with strong gains at $4,968 a tonne, up from Wednesday's finish at $4,855 a tonne.
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