Copper prices rebounded on Monday to recover last week's late losses, sparked when striking workers at the world's largest copper mine agreed to go back to work. Copper for delivery in three months on the London Metal Exchange had risen $130, or 1.7 percent, to $7,720 a tonne.
The contract tumbled $100 on Friday to close at $7,590 a tonne on news that workers agreed to accept a new contract, ending a 25-day strike at Chile's Escondida mine and that output should be back to normal this week. "That sell-off was a gut reaction to the strike and now copper's looking a bit cheap," a Sydney trader said.
Escondida, which is majority owned by global miners BHP Billion Ltd/Plc. and Rio Tinto Plc, produces about 3,500 tonnes of copper daily. Copper attracted light buying interest across much of Asia, especially from Japan. Copper stocks at LME-registered warehouses represent less than three days of global consumption, though the Labour Day holiday on Monday in the United States was dampening interest, another trader said.
Copper prices on the Shanghai Futures Exchange were slightly higher in light volume trading in step with the upturned in LME metal. The most active November contract closed up 1,590 yuan at 71,010 yuan ($8,931) a tonne.
Shanghai spot copper rose 1,560 yuan from Friday to between 71,000 and 71,300 yuan. But strong jobs data in the United States on Friday acted as a double-edged sword for metals markets on Monday as some investors shied away from commodities in favour of equities.
Tokyo and Seoul stocks rose to their highest level in more than three months on Monday, buoyed by hefty US jobs growth figures that lifted optimism about the world's largest economy. Three-month nickel dropped $150 to $28,550 a tonne on profit taking, despite a fundamental outlook pointing to tight supplies. Nickel stocks in LME warehouses of 5,358 tonnes, with only 3,114 tonnes available to the market, represents less than one day of global consumption.
Reflecting a less critical situation in stocks, backwardation the premium for cash settlement over three-month delivery eased to $3,175 from $3,400 on Friday.
Three-month aluminium was $10 lowers at $2,500 a tonne. The most active Shanghai November aluminium contract ended up 230 yuan from the previous close of 19,500 yuan a tonne.