bhp up in ny Metals bouncing back, and BHP SP is as well. So...

bhp up in ny Metals bouncing back, and BHP SP is as well. So don't sweat the weekend, thinks will improve Monday. This article from Reuters

By Nick Trevethan

LONDON (Reuters) - Copper rebounded after Thursday's 3.4 percent tumble and new record highs are possible on a combination of a strike by Chilean miners and bargain hunting, dealers said.

"The market is really tight, so any bad news (for supply) will give support," one analyst said.

"There was a sell off yesterday and this is a normal bounce back. People still think the price will go higher so they buy when the market dips. It is possible we will see new highs. People are talking about $8,000."

More than 200 workers at the Lomas Bayas copper mine in northern Chile voted on Thursday to go on strike after rejecting a contract offer from Canada's Falconbridge Ltd., a union spokesperson told Reuters.

A group of Mexican unions are planning nationwide stoppages on Friday in an escalating face-off with the government which last week led to the killing of two workers in a botched bid to break a strike.

By 0949 GMT, London Metal Exchange copper for delivery in three months was up $115 at $7,170/$7,180 a tonne.

Traders said some investors were being forced to buy back positions because they had used up their margin facilities.

"The people who are buying now are not buying because they want to, they are buying because they have to," a dealer said.

Initial margins are funds or credit lines that an investor is required to set up, and represent the largest likely daily move in a contract's price.

LCH.Clearnet, which clears LME contracts, was expected to announce large hikes due to growing volatility when it changes initial margin calls next week, traders said on Monday.

On Friday copper rallied 7.7 percent or nearly $500 a tonne. The current margin is $268 and traders said they could double.

The supply threats helped to offset selling on Thursday after a rise in Chinese interest rates.

China, the world's top copper consumer, raised interest rates for the first time in 18 months to cool its fast-expanding economy, giving nervous investors an excuse to cash in positions and copper dropped 3.6 percent.

"There is obvious nervousness about the potential for interest rates to bring the bull market to an end," Sempra Metals economist John Kemp said.

"The market knows there will be a correction and interest rates may be a trigger. What we saw yesterday was a foreshock, but like the next San Francisco earthquake, you know it is coming, but you can't know when," he said.

SUBSTITUTION THREAT

Dealers warned that copper, used in wiring, tubing and coins, was in danger of becoming a victim of its own success.

On Wednesday the metal reached a record $7,385, gaining as much as 68 percent this year and up more than five-fold from cyclical lows in 2001.

The soaring price means copper consumers are seeking to replace the metals with cheaper alternatives.

In plumbing for example, plastic piping has increased in popularity at the expense of copper.

LME aluminium was at $2,778/$2,782 versus the previous close of $2,747. On Wednesday, the metal hit its highest in nearly 18 years of $2,845 a tonne.