New York copper futures rallied on Wednesday, boosted by ongoing strikes at several large Latin American mines that posed potential threats to supply in a market that is already running a deficit, traders said.
"I think more than anything else people are afraid to sell this thing, having been burned trying before. There has been some new fund-type buying in the last few days, but what you are seeing today is no one willing to sell it," said one copper broker, adding that labour strikes gave copper the boost.
On the New York Mercantile Exchange's Comex division, copper for December delivery nudged up to $3.77 per lb., a fresh high dating back to mid-May on the continuation chart, but steadied with 2.55-cent gains at $3.7365 a lb. Peruvian workers at major copper producer Southern Copper entered their second day on strike, saying they would stay off the job until their demands were met.
About 2,000 union workers at the Toquepala and Cuajone mines, producing 370,000 tonnes of copper annually, and the Ilo smelter, with output of 350,000 tonnes a year, walked out on Tuesday morning, demanding higher wages.
In Mexico, Grupo Mexico, which also controls Southern Copper, awaits a court ruling on whether the two-month-old work stoppage at its huge Cananea copper pit is legal. Some observers think strikes at Southern Copper may lead to work stoppages throughout Peru, the world's third-largest producer of copper and zinc and a major supplier of precious metals. Last Friday, Peru's biggest mine workers union said it would call a nation-wide mine strike on November 5.
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