Shanghai copper rose by just under half a percent on Monday following a steady performance in the previous session by London futures, which shrugged off the end of a strike at a major mine.
Shanghai September copper was up 270 yuan at 64,770 yuan ($8,557) a tonne. Copper for delivery in three months on the London Metal Exchange eased $30 to $7,870, having stalled at $8,000 resistance every day last week.
But prices, which rallied nearly 1 percent on Friday, remained firm, despite the resolution of a major strike at one mine in Chile and the restart of another after violent protests last week. "The strike is over but copper hasn't fallen quite as much as I had thought it would," a dealer in Sydney said.
The union at Chile's 440,000-tonne-per-year Collahuasi complex accepted a pay offer on Friday to end the stoppage at the mine, which accounts for around 8 percent of Chile's total copper output.
In a separate dispute, sub-contractors at Codelco remained on strike, but operations at the Andina mine were returning to normal over the weekend after a week-long stoppage that has cost 700 tonnes of lost copper production a day.
In Canada, the strike at Strata's Canadian Copper Refinery continued, and in Peru, the dispute at Southern Copper Corp was still not resolved, but unions extended a strike truce in order to continue talks.
The Sydney dealer noted that the cash to three-month spread was a relatively wide $105 backwardation, having traded between March and late June at around $60.
"The backwardation is almost double what it has been and it looks like there may be a short or two out there getting squeezed." Tightness was highlighted by stocks of copper in London Metal Exchange warehouses, which fell 1,075 tonnes to 97,550 tonnes on Friday, equivalent to two days of world consumption and their lowest in almost a year.
But inventories could rise in the near term. "Traders in China are diverting excess copper imports to South Korea as China's demand for copper is weak on large local supplies," said a Seoul-based trader. "About 3,500 tonnes of copper have already arrived at South Korean ports and another 5,000 tonnes will be delivered by the end of this month."
Mid June saw a blip up in the otherwise consistent decline since February in LME stocks as a regular cargo of Polish copper bound for China was diverted to LME warehouses in South Korea.
China's imports of refined copper and copper alloy were 121,991 tonnes in June, down 6 percent from May. Imports for the first half of the year hit 998,077 tonnes, up 117.9 percent from a year, customs data released on Monday showed. Aluminium was up $6 at $2,796, with the news dominated by last week's $38 billion-bid for Canadian aluminium company Alcan Ltd by Rio Tinto Ltd/Plc.
Rio's shares were down 3.4 percent in Australia, despite a 0.25 percent gain in the S&P/AX 200 index. Rival minor BHP Billion was half a percent lower. LME lead was $15 down at $3,015 but remained close to Friday's record $3,040 high.