Copper slipped on Thursday after a hefty rise in inventories but strike threats at mines supported prices and lead set a fresh record high. Copper for three-months delivery on the London Metal Exchange (LME) ended the day at $7,445 a tonne, down $65 from Wednesday's close but up from an earlier low of $7,405 hit after news of LME stocks rising 5,400 tonnes.
Stocks of copper currently stand at 119,600 tonnes, still less than three days of global consumption. "Prices are modestly lower because of a big increase in LME stocks - up 5400 MT on the day," Man Financial analyst Edward Meir said. "This is making markets slightly nervous about the Shanghai stock numbers due out tomorrow."
Traders closely follow figures showing how much unused metal is sitting in warehouses, but the possibility of mine strikes muted the impact of the LME stock increase.
"The reason we do not see a hefty impact on prices is the perception of potential supply shortfalls if any of those strikes materialise," analyst Sudakshina Unnikrishnan at Barclays Capital said. Xstrata Plc's Canadian copper refinery (CCR) is running at less than 30 percent capacity after 430 unionised workers went on strike last week and it could be weeks away from hitting its target of 35 percent, the Anglo-Swiss miner said. Subcontract workers at Chile's Codelco said on Wednesday they planned to meet company executives to discuss demands for better working conditions amid a strike threat to the world's No 1 copper miner.
Workers at Collahuasi in Chile, one of the world's largest copper mines, have set a strike vote for June 27, barring an improved wage offer from the company. "Copper lacks an overall trend and appears to be waiting to react to either news on strike action or major economic releases before deciding where to go," Standard Bank said in a research note. Traders on the floor of the LME said bargain-hunters would continue to pick up metal whenever prices fell.
Lead for delivery in three months hit $2,550 a tonne in early European trade before ending the day at $2,460 against $2,510 on Wednesday, when it rallied 4.6 percent. Stocks of lead, which is mainly used in battery consumption, fell 275 tonnes to 42,900 - enough for two days of global consumption.
Chinese lead exports fell 56.6 percent to 87,254 tonnes in the first four months of the year, while a 10 percent tax on exports is likely to further cut trade. Nickel was slightly up at $37,000 against $36,500, having fallen nearly 15 percent this week to a low of $36,100 on Wednesday after Chinese stainless producers said they were considering trimming output. Stocks of nickel in LME warehouses stand at 9,048 tonnes, the highest in almost a year. Aluminium was $31 down at $2,709, while zinc shed $100 to $3,510 and tin was down $150 at $13,900/13,950.