On Tuesday, copper prices improved as extended strike at Codelco’s Chuquicamata copper mine raised concerns about supply, while a weaker dollar also grant some support.
Having been on strike since mid-June workers at Codelco’s sprawling Chuquicamata copper mine in Chile, rejected the company’s latest offer over the weekend, to demand better healthcare and retirement benefits from the world’s top copper producer.
“Supply side issues overweighed concerns about the economic backdrop. Copper prices remained supported by the ongoing strike at Codelco’s Chuquicamata copper mine,” said ANZ in a note.
The U.S. dollar on Tuesday dropped on the prospects of monetary easing by the Federal Reserve, boosting demand for dollar-denominated metals as they are now cheaper to import using other currencies.
Three-month copper on the London Metal Exchange rose 0.5% a tonne, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) advanced 0.6% a tonne.
But the price hike was not stable, with copper prices at some point retreating back to almost being unchanged from the previous session amid uncertainty around Sino-U.S. trade war resolution and rising U.S.-Iran tensions.
“The fundamentals now have little impact on the futures market. Prices now have more connection with the macro side such as exchange rate and trade war,” said CRU’s copper analyst He Tianyu based in Beijing.
Investors are keeping a close watch on a scheduled talk between U.S. President Donald Trump and Chinese President Xi Jinping later this week, but sentiment was not helped by reports that Trump would be content with “any outcome”.
Trump said he viewed this week’s meeting with Xi as a chance to see where Beijing stands on the two countries’ trade war and is “comfortable with any outcome” from the talks. Meanwhile, China said both nations should make compromises in trade talks.