Copper steady as Escondida deal takes edge off supply fears

LONDON: Copper prices held steady on Friday as a weaker dollar and strikes at some operations were offset by a deal between management and workers to avert industrial action at the world's largest copper mine in Chile.

Benchmark copper on the London Metal Exchange (LME) edged up by 0.1% to $9,479 a tonne by 1120 GMT and was on track for a weekly gain after shedding 2.7% last week.

The agreement at the Escondida copper mine in Chile has taken the edge off supply worries after industrial action elsewhere, said Concord Resources analyst Duncan Hobbs.

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Workers at Codelco's Andina copper mine walked off the job on Thursday after rejecting the latest contract offer,while workers at JX Nippon Copper's Caserones mine also went on a strike after labour contract talks collapsed.

Supply constraints in copper do not depend on strikes, analysts at Jefferies said, adding that global copper supply will continue to fall short of expectations and that a lack of supply growth should be positive for prices.

Prices were also supported by a weaker dollar, which makes metals cheaper to holders of other currencies. Global equities, meanwhile, were trading just below record highs, underscoring market appetite for risk.

INVENTORIES: On-warrant copper stocks in LME-registered warehouses are near their highest since May 2020 at 222,600 tonnes while weekly data showed Shanghai Futures Exchange stocks slipped 6.5% to 93,032 tonnes.

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CHINA PREMIUMS: The Yangshan copper premium rose to $65 a tonne, its highest since March 23, indicating improving demand to import the metal into China.

OTHER METALS: LME aluminium rose 0.5% to $2,595 a tonne, zinc added 0.9% to $3,021, lead rose 0.8% to $2,325, tin was up 0.8% at $35,555 and nickel was flat at $19,670.