Copper and nickel soar

05 Aug, 2006

Copper prices jumped 5.5 percent on Friday and came within a whisker of $8,000 a tonne on worries about the possibility a strike at Escondida in Chile, the world's largest copper mine.
Nickel ended up 5.3 percent at $25,700 on the London Metal Exchange from Thursday's $24,400 close after a week-long walkout at the 54,000 tonne-per-year Voisey's Bay nickel mine in Canada.
Earlier nickel hit a high of $26,000, some $850 short of last month's record high, while copper saw $7,999 on LME Select.
Copper closed up $410 at $7,860.
Dollar-denominated metals were also supported by the fall in the US currency on growing expectations that the US Federal Reserve would hold benchmark interest rates steady at 5.25 percent next week after a weak jobs report.
"There's not a direct link between the dollar and commodity prices ... but it does have an impact," an analyst said.
"Fundamentally, though, copper is in a very strong position. Demand is good and there are supply problems."
Workers at Escondida, majority owned by London-listed BHP Billiton, have given mine managers one last chance to raise a salary offer and avoid a strike starting on Monday.
Escondida's management said it was still evaluating whether to improve the offer to 2,000 workers.
"I think we will see a strike, it is a game of cat and mouse that is going on," a trader said. "They will be rattling their swords at each other and probably go out for a day or two."
A Standard Bank report said a strike was inevitable.
Chile's Codelco Chuquicamata copper mine, hit by a rock slide last month, is likely to be producing at reduced rates for about three months.
Zinc ended up $90 at $3,410, supported by stocks falling to their lowest since 1992.
Aluminium closed up $39 at $2,539, lead rose $23 to $1,140 and tin added $100 to end at $8,300.

Read Comments