Copper Eases as Striking Miners Return to Negotiations

By Katherine Dunn 

LONDON--Copper prices pulled back Wednesday, ahead of renewed talks between striking workers and management at the world's largest copper mine.

The three-month London Metal Exchange copper price was down 0.21% at $6,034.50 a metric ton in midmorning trade, continuing a decline from 20-month highs reached on Monday.

Union workers at Chile's Escondida mine in the Atacama Desert said they would begin talking with management on Wednesday, after five days of striking. The mine is majority-owned by BHP Billiton Ltd.

The union went on strike last Thursday over what they said were plans to cut worker benefits after government mediation between the two parties broke down.

"A quick resolution would most likely put some pressure on copper prices, with the market expecting a lengthy strike," ING said in a morning commodities note. Copper is up 4% so far this week.

The next day or two should give an indication of whether the strike is going to be a longer strike or over within a few days, said Robin Bhar, an analyst at Société Générale.

"I would put the odds at no better or worse than 50/50," Mr. Bhar said.

A stronger dollar was also weighing on the metal on Wednesday, after Federal Reserve Chairwoman Janet Yellen raised expectations for a rate increase next month. The WSJ Dollar Index was up 0.18% on Wednesday. A stronger dollar makes dollar-denominated commodities more expensive for buyers who hold other currencies.

The union talks come amid a supply pinch, after Freeport-McMoRan Inc. said it had stopped production at its Grasberg mine in Indonesia because it had not yet received an export license for the mine, following new regulations for exports introduced by the government in mid-January.

Nickel rose to a 10-week high on Wednesday after the Philippines Department of Environment and Natural Resources said Tuesday that it planned to cancel 75 contracts with mining companies because of environmental concerns. However, those projects aren't yet producing nickel, so the cancellations are more likely to affect long-term production and prevent new mining projects.

Nickel prices were up 0.42% at $10,835 per metric ton on Wednesday.

The other base metals were mixed. Aluminum was up 0.32% at $1,892 per ton, lead was down 0.27% at $2,358.50 per ton, zinc was down 0.50% at $2,885 per ton and tin was up 0.88% at $19,965 per ton.

Ryan Dube

and Cris Larano contributed to this article.

Write to Katherine Dunn at [e-mail]

(END) Dow Jones Newswires

February 15, 2017 06:16 ET (11:16 GMT)

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