US copper futures charged to a two-month peak at the open on Thursday as momentum buying continued to gather steam following a one-day holiday break, traders said. The New York Mercantile Exchange's energy and commodity markets were closed on Wednesday for the US Independence Day holiday.
Traders noted London's break above $7,800 a tonne on Wednesday as well as a stronger technical backdrop in New York over the past week added to the market's overall bullish tone.
"The momentum is just continually building. We have cleared the first hurdle at $3.50 (a lb), and are now just building and getting ready to attack the highs at $3.7790," said Larry Young, senior trader at Infinity Brokerage Services in Chicago.
Copper for September delivery was up 3.90 cents, or 1.1 percent, to $3.5840 a lb by 10:07 am EDT (1407 GMT) at the New York Mercantile Exchange's COMEX division, just shy of its early-session peak at $3.5950, its highest level since May 11. Estimated futures volumes amounted to 3,618 lots by 9 am.
Fundamentally, possible strike action at one of the world's largest copper mines and ongoing disputes around the globe have sparked the most recent wave of speculative interest amid concerns the work stoppages would significantly affect production and place further strain on global warehouse stock levels. Workers at Chile's Collahuasi, a major copper mine, said late on Wednesday they had advanced in talks with management to reach a new contract and that negotiations would continue on Thursday. Management and the union have until Friday to reach a deal. The union would then vote on it and, if they reject it, a strike could start as early as Monday. Collahuasi accounts for around 8 percent of Chile's total annual copper production, with output of some 440,000 tonnes per year of copper in cathodes and in concentrates.
Elsewhere in Chile, subcontracted workers at Codelco, the world's biggest copper mining company, said on Wednesday they will continue their strike for better pay and conditions but that talks with company officials offered hope for a solution.
In Mexico, miners and metalworkers walked off the job in a one-day strike on Thursday in a protest over safety conditions and a long-running power struggle in the union.