London Metal Exchange (LME) copper futures edged up in Asia on Thursday on bargain hunting, after dipping below $3,890 a tonne following the ending of a one-day strike at a major smelter in Mexico.
However, overall trade in Asia remained cautious ahead of LME November options declaration and the month-end next week.
LME copper for delivery in three months was at $3,918/3,928 a tonne, up from Wednesday's London close of $3,915. In Asia, copper dipped briefly below $3,890 a tonne after Group Mexico said its workers had agreed to end a one-day strike at a smelter and refinery that are fed by one of the world's largest copper mines.
Group Mexico spokesman Juan Rebelled told Reuters that during on Wednesday's evening shift workers would partially restart operations at the Nacozari smelter and refinery, which mainly serve the giant La Cardiac mine.
"We've not seen a great deal of activity, but obviously the settlement of the short strike at a Group Mexico (facility) has been a minor influence," said a senior LME trader in Shanghai.
"The fact is that the market is still volatile," he said, adding that wild price movements in the last few days have driven business away.
A trader in Tokyo said the market may re-test last week's record high of $4,018 in the near term because of volatile trading ahead of next on Wednesday's November options expiry.
"There is the options situation to worry about. The options declaration day is a day after the LME Dinner," the first trader said. "Wow that's going to be an interesting one."
In copper, there are 2,979 calls open at $4,200, and 2,782 at $3,800. The November date is currently at $4,100 but open interest is small.
When the market eases, delta hedge cover against $4,200 is unwound (sold); when it rises, delta-hedge buying takes place as they get near to being in the money.
Traders said current price fluctuations also reminded investors of a steep decline in copper prices during last year's annual LME Week, when a massive fund sell-off took copper prices off more than 16 percent from the then peak of $3,175.