Comex copper closes strong

Copper futures ended in New York with healthy gains on Monday as speculative players covered short positions following news that union workers at Chile's Altonorte smelter may strike on Tuesday, traders said.
They also said participants protecting their long positions also may have driven prices higher, using news like a possible strike at Chile's only privately owned copper smelter as a reason to draw other buyers into the market. "The market just doesn't want to be short before the year end. And there is the threat of the Chilean strike," said one New York copper dealer.
Copper for March delivery finished with a gain of 2.15 cents at $3.1335 a lb. on the New York Mercantile Exchange's COMEX division, trading in a higher range between $3.0965 and $3.1570 a lb.
Spot December went up 1.30 cent to finish at $3.12 a lb. The rest settled from 1.15 to 2.85 cents higher. While traders said the Chilean news provided an underpinning for prices and they attributed much of copper's rise to short covering, they also emphasised that thin trading conditions allowed for loftier gains than might otherwise have been achieved.
"I think the players that are still involved, they want to keep the price up before year end. That's a definite motivation for them to keep the price from getting too low. And the volume is thin enough that they are able to do that," a trader said. COMEX estimated final volume at just 4,000 lots, compared with a light 5,415 lots on Friday.
In Chile, union workers at Xstrata Plc's Altonorte copper smelter were waiting to see if the company would request government mediation or allow a strike to go ahead, after more than 300 smelter workers rejected a labour contract Saturday.
The union's current contract at Altonorte, which churns out 290,000 tonnes of anode copper a year, expires on Tuesday. But government mediation would give the two sides five more days to negotiate a new deal.
"So, the strike could be tomorrow. That would explain why we went up. But it was probably by more than it would have gone up normally, because of the light volume," the trader said.
In other news, inventories at US wholesalers rose a larger-than-expected 0.8 percent in October led by autos, machinery and computer equipment, while sales fell 0.5 percent, the government said on Monday. Analysts polled by Reuters had projected a 0.5 percent gain in wholesale inventories in October.
The inventory-to-sales ratio, a gauge of how many months it would take to deplete existing stocks at the current sales pace, rose to 1.20 in October, its highest since 1.20 in June 2005, from 1.18 in September.
In London, copper inventories added 2,250 tonnes to 168,600 tonnes on Monday, according to the London Metal Exchange. COMEX stocks rose 13 short tons to 32,209 tons on Friday. LME three-months copper rose to $6,930 per tonne by the kerb close, up from its Friday finish at $6,880 a tonne.