Copper broke through $8,000 a tonne for the first time since May as mine workers in Chile, the world's largest producer, went on strike and lead hit a new all-time high on supply fears.
Copper for three month delivery on the London Metal Exchange ended up at $7,990 a tonne from $7,840 on Friday. Earlier it touched $8,015, the highest level since May 9 and a gain of more than 10 percent since late May.
In New York, copper for September delivery settled up 3.50 cents to $3.6295 a lb at the New York Mercantile Exchange's COMEX division, its best settlement since May 9. Trading ranged from an overnight low at $3.5890 to a session peak at $3.6650.
Workers at one of Chile's largest copper mines, privately owned Collahuasi, started an indefinite strike on Monday after failing to reach an agreement with management over pay and conditions. "Most often, strikes in Chile are relatively brief ... so it is more psychological, but we don't know how long the strike is going to last," said analyst Stephen Briggs at Societe Generale Corporate and Investment Banking.
"This will have no effect upon production if it is over tomorrow but it will have a great effect if it lasts a year." Collahuasi produces about 440,000 tonnes of copper a year, around 8 percent of Chile's total output.
Stock of copper, used in the power and construction industries, also encouraged a more bullish view of prices. LME inventories fell by 3,400 tonnes to 102,075, little more than two days of global consumption and their lowest level since last August.
LEAD HITS FRESH HIGH: Stronger sentiment on commodity markets overall pushed the Reuters/Jefferies CRB Index to a seven-month high at 322.19. That, with firm equity markets, helped boost London-listed miners such as Kazakhmys Antofagasta and Xstrata which all gained more than 2.5 percent to stand among the 10 largest market gainers.
Other base metal gainers included lead which hit a new record peak at $2,965 and closed at $2,950 from $2,850/2,860 as speculators bet on tight supplies and lower Chinese exports. With the lead market still recovering from mine production losses, the industry is set to register a small shortfall of about 11,000 tonnes in 2007, J.P. Morgan said in a report.
Canada's Ivernia Inc whose giant Magellan lead mine in Australia has been shut since April, said on Saturday it was seeking community comment on a proposal to ship lead concentrate from the port of Fremantle. UBS raised its forecast for lead to $2,249, up by 31 percent from its previous forecast for 2007.
Aluminium ended at $2,812 from $2,813, zinc gained $15 to $3,440 and tin was bid at $14,100 from $14,150. Nickel ended at $34,300 from $35,300. Earlier it slid to $34,150, the lowest since the middle of January, on fears of falling demand from Chinese stainless steel producers and substitution.
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