labour problems ease

LABOUR PROBLEMS EASE
Copper falls 1 percent in Shanghai as strikes diminish
The easing of strikes at some copper operations has led to a sharp one percent price fall in Shanghai

Author: Richard Dobson
Posted: Tuesday , 17 Jul 2007

TAIPEI (Reuters) -

Shanghai copper fell almost 1 percent on Tuesday after an easing of strikes that had been supportive of prices recently, while slightly lower London stocks and lacklustre China demand also weighed.

The most active Shanghai September copper futures contract was down 590 yuan or 0.9 percent at 64,270 yuan ($8,495) a tonne by the end of the morning session.

Copper for delivery in three months on the London Metal Exchange dropped $10 to $7,785, from $7,795 at the close on Monday, when the metal dipped $105 following the end of strikes at the Collahussi and Andina mines in Chile late last week.

"The easing of the strikes has stripped copper of its support, while higher London stocks have coincided with the seasonal slow period with lacklustre consumption in Asia," said Cai Luoyi at China International Futures Co. in Shanghai.

Shanghai spot copper prices ranged between 63,450 yuan to 63,580 yuan per tonne, down 610 yuan.

But strikes continued in Canada at Xstrata's Canadian Copper Refinery, and in Peru, where the dispute at Southern Copper Corp. was still not resolved.

In Mexico, the mine union said it postponed the deadline until July 30 for a threatened strike at three Grupo Mexico mines.

LME copper stocks rose 1,325 tonnes to 98,875 tonnes on Monday, but are still more than 48 percent lower than at the end of 2006.

In China, a more than doubling of copper imports in the first half of the year has hit domestic prices and slashed margins, with some importers redirecting material to other locations such as South Korea, said traders.

"Deliveries into the two South Korean LME warehouses snapped a three-week string of net declines in the total LME copper stock figure," said Deutsche Bank in a daily note.

"That development coupled with news of production re-starts at two major producers in Chile after resolutions to industrial action undermined support for copper," said Deutsche Bank.

In other metals, lead paused its upward run, easing $15 to $3,075 from the close of $3,090 on Monday, when it hit a record high of $3,125.

The metal has risen by more than 85 percent this year, lifted by strong China demand and tight supply, which has been exacerbated by restricted exports from Australia. Nickel was $100 lower at $32,000 per tonne, extending Monday's $425 slide.

The metal has fallen around 40 percent since hitting a record of $51,800 in May this year -- more than double its price the same time one year ago -- on concerns that soaring prices were causing consumers to curb their use of the metal.

The most active aluminium contract on the Shanghai exchange, September slipped 0.4 percent to 19,510 yuan per tonne. Metal Prices at 0402 GMT Metal Last Net Change Pct Move LME Cu 7785.00 -10.00 -0.13 SHFE Cu* 64630.00 -670.00 -1.03 LME Alum 2785.00 -10.00 -0.36 SHFE Alu* 19430.00 -60.00 -0.31 COMEX Cu** 358.85 0.00 +0.00 LME Zinc 3490.00 -20.00 -0.57 LME Nickel 32000.00 -100.00 -0.31 LME Lead 3075.00 -15.00 -0.49 Change so far in 2007 Metal Latest bid End prev year Pct Move LME Cu 7785.00 6330.00 +22.99 SHFE Cu* 64630.00 60080.00 +7.57 LME Alum 2785.00 2805.00 -0.71 SHFE Alu* 19430.00 20550.00 -5.45 COMEX Cu** 358.85 287.10 +24.99 LME Zinc 3490.00 4230.00 -17.49 LME Nickel 32000.00 33325.00 -3.98 LME Lead 3075.00 1670.00 +84.13 LME Tin 14100.00 11510.00 +22.50 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc

SHFE zinc began trading on March 26, 2007 ($1=7.566 yuan) (Additional reporting by Alfred Cang in Shanghai)