NEW YORK, Oct 1 (Reuters) - Copper futures in New York began the fourth quarter with healthy gains, and closed Monday even stronger as supply was threatened by pending strikes at several Latin American mines, traders said.
"There's obviously some tightness in the market, and that's without China contributing much. Plus there's a strike that's due to start down in Peru. There is no one reason for that it rose today, but we've managed to get up to an important area," said one broker pointing out that copper ended the floor session near the 9-1/2-week peak set on Friday.
Copper for December delivery (HGZ7: Quote, Profile, Research) finished 5.15 cents higher at $3.6915 a lb on the New York Mercantile Exchange's COMEX division. It pushed up to a high at $3.6950, just off Friday's $3.6980 peak dating back to July 23.
A Mexican court ruled on Monday that striking miners at Grupo Mexico's (GMEXICOB.MX: Quote, Profile, Research) San Martin copper, zinc and silver mine can continue with work stoppages for now.
A court ruling on the legality of a two-month-old strike at the group's much bigger Cananea copper mine is due later this week, a Grupo Mexico lawyer said. [nN01304077]
In Peru, unions at Southern Copper (SPC.LM: Quote, Profile, Research)(PCU.N: Quote, Profile, Research) have filed documents saying workers would go on strike Oct. 2.
Southern Copper is a major copper producer controlled by Grupo Mexico (GMEXICOB.MX: Quote, Profile, Research), whose Cuajone and Toquepala mines put out 370,000 tonnes of copper annually. [nN24305783]
Moreover, last Friday, Peru's biggest federation of mineworkers unions it has agreed to call a nationwide strike at mines across the Andean nation on Nov. 5. [nN28209065]
Peru is the world's third-largest producer of copper and zinc and a major supplier of precious metals.
Along with supply issues, demand fundamentals seem to be going strong, said traders, pointing out that new beginning-of-quarter investment money was thought to be propping up prices along with a healthy manufacturing report.
"New quarter, new money, that's what we're seeing. Not across the board in all commodities, but copper seems to have a little more interest that others. That may pick up as the quarter goes on," said one copper broker.
Copper purchases increased following the release of U.S. manufacturing data from the Institute for Supply Management. While ISM said production growth slowed slightly in September, employment, deliveries and backlog components all rose.
"Manufacturing seems to have been little affected by the subprime debacle during the summer and inflation pressures seem to be abating as well -- setting a good environment for investors entering the fourth quarter," said Tom Sowanick, chief investment officer at Clearbrook Financial in New Jersey.
Later this week, other U.S. economic data could toss copper prices around further with Tuesday's release of U.S. car and truck sales, Thursday's factory orders report and Friday's issue of the September U.S. employment report.
Since mid-August, benchmark December copper has risen more than 21 percent to Friday's high. Some analysts said they thought December futures could hit $4 if they break $3.71 resistance.
"In the broader scope of things, this market managed to work its way up without the frenzied buying from China that many people had expected. It's a bull market," a trader said.
China will unlikely add much this week either. Shanghai copper futures will be closed all week for national holidays.
In London, LME copper for delivery in three months (MCU3: Quote, Profile, Research) ended Monday at $8,110 a tonne, up from Friday's $8,020.
Add to My Watchlist
What is My Watchlist?
