US copper futures extended the prior session's gains early Thursday, rising nearly 3 percent, as firm technicals and threatened strike action underpinned the advance, traders said.
Larry Young, senior trader at Infinity Brokerage Services in Chicago, said the market's ability to hold above the May low at around $3.1650 a lb this week prompted traders to return to the buy side as prices backed away from that key support level.
"Any time there is a sell-off, we're picking the bottoms and riding it on the way up, looking to take out contract highs," he said, adding that another challenge of $3.50 was likely in the cards, near term.
Copper for July delivery climbed 9.20 cents, or nearly 2.8 percent, to $3.4050 a lb by 10:36 am EDT (1436 GMT) on the New York Mercantile Exchange's COMEX division, closer to the upper end of its early $3.3040-$3.4150 trading band. By 9 am, copper futures volume reached 3,114 lots. Copper prices also benefited from largely benign US economic data that was considered to have little impact on the Federal Reserve and inflation.
Higher energy costs boosted producer prices 0.9 percent in May but, excluding volatile food and energy costs, prices paid at the factory gate were up a more moderate 0.2 percent, the Labour Department reported on Thursday. Meanwhile, lingering strike threats in Latin America and Canada continued to support prices at a time when global exchange-monitored stockpiles fell. Xstrata Plc's CCR copper refinery in Montreal continues to operate at a reduced rate after 430 workers went on strike this week.
In Chile, workers at Collahuasi, one of Chile's largest copper mines, planned demonstrations this week to demand an improved labour contract proposal from mine managers. In Mexico, a threatened strike at the Cananea copper mine and eight other facilities was expected to begin Friday, if no deal was reached with mine owner Grupo Mexico.