LONDON: Copper eased on Thursday as concerns over whether the supply and demand backdrop justified its recent rally prompted some to cash in the previous day's gains, though it remained underpinned by the threat of supply disruptions.
Workers at the world's largest mine in Chile went on strike from 8.00 am local time (1100 GMT) on Thursday, with the union saying night shift workers would not be replaced.
In Indonesia, Freeport-McMoRan Inc's Grasberg mine is yet to be granted a new export permit.
Three-month copper on the London Metal Exchange was untraded in official midday rings, and was last bid down 0.4 percent at $5,873 a tonne following a 1.7 percent jump in the previous day. Copper hit $6,007 on Feb. 1, its highest since Nov. 28, and the metal used in construction has risen 12 percent since the US elections in November, partly on the back of US President Donald Trump's pledge to lift spending on infrastructure.
With positioning in the market looking overdone, prices were prone to profit taking, Julius Baer's head of commodity research Norbert Ruecker said.
"We think copper is trading at the upper end of its fundamentally justified range, and that prices look excessive at current levels," he said.
"The price move we've seen over the last few months is really the poster child of reflation euphoria and we question that, especially to what extent infrastructure spending expected from the States will really affect copper demand."
The metal remained supported however by a threats to supply, which have been an increasing focus in copper markets in the past month, Goldman Sachs said in a report.
"Downside risks to supply appear increasingly likely to materialise and translate into copper production losses these supply-side dynamics appear increasingly likely to support our tactically bullish 1H17 copper view," said Goldman. BHP Billiton Plc has begun halting operations at the Escondida copper mine in northern Chile, ahead of the planned strike on Thursday, a union leader told Reuters.
Freeport warned it would scale back activities at its Grasberg copper mine, an official at Indonesia's main copper smelter, PT Smelting, said, amid a workers' strike and other issues.
Traders are also looking ahead to Chinese trade data on Friday for signals of the strength of the world's No.2 economy and for numbers on copper imports.
Among other metals, LME aluminium was up 0.4 percent at $1,855.50 a tonne in official midday trading, while nickel was down 0.7 percent at $10,430 a tonne.
The other base metals were untraded in official rings. Zinc was last bid 0.4 percent higher at $2,858 a tonne, while lead was flat at $2,388 a tonne. Tin was last bid 0.9 percent higher at $19,200 a tonne.
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