New York copper futures surged to a 4-1/2 month peak as strikes in Peru got under way on Tuesday, threatening supply in a healthy demand environment, traders said. The copper rally reversed early losses incurred when a rising dollar hit metal prices across the board.
Copper for December delivery rose to $3.7670 a lb, a level last seen in mid-May on the New York Mercantile Exchange's Comex division. Shortly after, it pulled off the high and steadied 2.00 cents higher at $3.7115 per lb.
It reached an early low of $3.6560, up from Monday's low. Peruvian workers at Southern Copper started an indefinite strike for higher wages at the Toquepala and Cuajone mines, which produce 370,000 tonnes of copper annually, and the Ilo smelter, with output of 350,000 tonnes a year.
About 2,000 workers belong to the unions. Southern Copper is controlled by Grupo Mexico whose huge Cananea copper pit in Mexico has also been hit by a strike. A court ruling is due later in the week on the legality of the two-month-old work stoppage. Last Friday, Peru's biggest federation of mine workers unions said it would call a nation-wide mine strike on November 5.
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