LME Copper Price Falls As Labor Negotiations in Chile Continue

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Metal Prices

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Steel and aluminum are getting all the attention these days — and perhaps rightfully so, given the international row over the U.S.’s steel and aluminum tariffs and the subsequent crossfire of counter-tariffs.

But copper, often referred to as “Dr. Copper” for its usefulness as an overall indicator of economic health, is also undergoing important developments.

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The LME copper price, however, has been on the downswing for much of June.

Three-month copper reached $7,268/mt as of June 11, but it has been all downhill from there. In the ensuing nearly two weeks, the LME three-month price has plunged 6.4% to $6,801/mt, according to MetalMiner IndX data.

The price, however, seemed to be begin to stabilize last week after closing at a one-month low.

Source: LME

Chinese Prices

Similarly, Chinese prices have dropped in recent weeks.

From June 11-24, China primary cash copper dropped from 53,840 yuan/mt ($8,226.38) to 51,470 yuan/mt ($7864.26), good for a 4.4% decline, according to MetalMiner IndX data.

Labor Talks in Chile

As is always the case with copper, labor negotiations in Chile, the world’s top copper producer, play a key role in the metal’s price.

Earlier this month, in an ongoing dispute at BHP’s Escondida mine, the company responded to a contract proposal from its unionized workers at the mine, Reuters reported.

“The company hopes … to reach a mutually beneficial agreement, and to touch on issues like the bonus and salary increases, which were not addressed in our response,” BHP said in a statement, according to the Reuters report. Per the report, the company must present a final contract offer by July 24.

In the same vein, Reuters reported Monday that workers at Codelco’s Chuquicamata mine are threatening to strike. The mine produced approximately 19% of Codelco’s total output in 2017, according to the report. Again, a strike there would certainly put support under the copper price.

U.S. Dollar

Meanwhile, the U.S. dollar, which is inversely correlated with base metals like copper, picked up steam from June 7-19, in line with the metal’s drop.

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However, the U.S. dollar index has tracked back in recent days, dropping from 95.50 as of Thursday to 94.30 late Monday afternoon.

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