copper to thrive, with or without china

By Leia Michele Toovey- Exclusive to Copper Investing News

Early Tuesday, copper rose to its highest level in more than two weeks. Contributing to copper?s ascent was a softer US Dollar; coupled with stronger foreign currencies. The biggest boost, although, came from cancelled warrants. Cancelled warrants represent metal generally earmarked for delivery. Cancelled LME copper tonnage stood at 16,400 metric tonnes as of Tuesday, up from 3,125 at the beginning of last week. Most-active May copper rose 8.10 cents, or 2.63 per cent, to $3.1635 a pound on the Comex division of the New York Mercantile Exchange. The contract peaked at $3.1990 overnight, its strongest level since January 28.

Sentiment that increasing demand around the world will more than compensate for decreased Chinese demand also boosted the red metal. Goldman Sachs held steady its forecast for 11.4 per cent growth from the nation; despite domestic measures to cool lending and restrain inflation.

Last year, China grew by 8.7 per cent. Purchases from other nations; the US and Japan are also powerhouses when it comes to copper consumption, will more than offset any potential decrease in Chinese consumption. As economies around the globe get back on track, the global copper market is anticipated to move into a deficit this year. Macquarie analysts wrote in a weekly report ?The 2010 market balance is a deficit of 300,000 to 400,000 tonnes following last year?s surplus.?

Monday, LME copper was positive. The Shanghai Futures Exchange is closed this week for the New Year holiday in China. Floor trading on the Comex is shut Monday for Presidents Day. That left the LME open, and copper for three-month delivery jumped $55 to close at $6,865 per metric tonne.

Company News

Lundin Mining Corporation today reported that underground mining employees at the Neves-Corvo copper mine in Portugal commenced a program of two-hour strikes at the beginning of each shift. The employees are demanding salary increases of 17 per cent. Commenting on the situation, Joao Carrelo, the company?s chief cperating officer said, ?We are disappointed with the action by a section of our employees who were last month granted increases well in excess of inflation and well above the national average.?

The company is making every effort to reduce the effect of the strike action. Management has rejected the request, and every endeavour will be made to reduce the effect of the action. The amount of production that may be lost is currently being assessed and will depend upon a number of factors, including the duration of the action.

On Wednesday, the Chilean government unveiled an expanded board of directors at State-owned copper miner Codelco. President Michelle Bachelet appointed former board member Nicolas Majluf as chairman of the nine-member board. The new board will choose a chief executive to succeed Jose Pablo Arellano, who has said he will not continue as CEO beyond March. The government said budget director Alberto Arenas had tendered his resignation and would take up a new post as a Codelco board director in March. Current board members Jorge Bande and Raimundo Espinoza, both stay on. They are joined by Jaime Roberto Gutierrez, Andres Sanfuentes, Marcos Buchi, Marcos Lima and Gerardo Jofre. The changes come in just weeks before President-elect Sebastian Pinera is set to take office. Pinera has vowed to implement deep reforms to make Codelco, the world?s largest copper producer, more efficient.

African Copper?s Mowana mine recorded a US$ 36.45 million net profit for 2009, compared to a loss of US$ 162 million in 2008. The company had made significant progress during the year, including the start-up of production at the flagship Mowana mine. ?With the return of favourable copper prices, and a ramping up of production, we look forward to the next 12 months with genuine excitement,? CFO Brad Kipp commented. Between August last year, when production at Mowana resumed, and the end of December, the mine produced 1,192 tonnes of copper-in-concentrate.