Copper prices traded in range and ended with small gains amid concerns over a strike at the world's largest copper mine in Chile. Data from China, including manufacturing and service sector activity, cast doubt over the sustained growth of the world's second-largest economy and largest copper consumer. Freeport McMoRan told employees in an internal memo that it sees "no returning to business as usual" at its Grasberg mine in the Papua province of Indonesia.
Freeport is under a concentrate export ban as it negotiates a new operating licence from the government of the Asian nation and Reuters reports in the memo, the Phoenix-based company announced that it has had to "drastic reductions" to manpower levels in efforts to cut costs. Chile expects economic activity growth to be hit by around one percentage point in February because of a strike at world no.1 copper mine Escondida, as copper output slides 12 per cent year-on-year, the government said.
Escondida's approximately 2,500 unionised workers began a strike on Feb 9 after contract talks with mine owner BHP Billiton failed, boosting global copper prices on expectations of tighter supply. Escondida produced around 5 per cent of world copper in 2016. This year, it had been forecast to produce around 1.2 million tonnes, Mining Minister Aurora Williams told on Thursday.
After 25 days (of strike) we can expect lower production already by some 95,000 to 100,000 tonnes, which naturally will go on rising while the strike is prolonged," she said. Technically market is under short covering as market has witnessed drop in open interest by -1.37% to settled at 12854 while prices up 0.45 rupees, now Copper is getting support at 396.6 and below same could see a test of 394.6 level, And resistance is now likely to be seen at 400, a move above could see prices testing 401.4.