US copper futures firmed at the open Friday, supported by a planned strike in Chile and global inventory data that continued to reflect tight supply, traders said. "Another big draw in London. Stocks have been consistently on the decline and that is keeping prices well supported, especially with these strikes hanging around in the background," said a New York metals dealer.
Copper for September delivery was up 1.25 cents at $3.44 per lb by 10:32 am EDT (1432 GMT) on the New York Mercantile Exchange's COMEX division, trading $3.42 to $3.4750 which was its highest in two weeks.
By 10:00 am, estimated futures volumes hit 4,763 lots. A planned strike at Chile's Collahuasi copper mine sparked a wave of speculative interest in the market on Thursday, as investors flocked to the buy-side amid worries output at the giant mine could place further strain on supply.
Collahuasi is one of the world's largest producers of copper, with output of some 440,000 tonnes per year of copper in cathodes and in concentrates.The recent spate of industrial action has turned investor attention away from the turbulence in the US subprime mortgage debt market, which roiled both equity and commodity markets earlier in the week.
Looking ahead, analysts believed base metals had a good chance at extending rallies, supported by forecasts of stronger global growth prospects. "Global metal consumption will continue to be supported by China's 10.5 percent growth and a firm Europe and Japan," said Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in Toronto.
"At the same time, the US will be less of a drag on the global economy and miner work stoppages should limit supply build during the summer," Melek said. Still, some believed demand from China, the world's leading copper consumer, will unlikely be as rampant as it was at the beginning of the year due to the abundance of local supplies and softer buying interest.
Imports of refined metal are expected to fall to between 95,000 and 110,000 tonnes this month - including some imports that were put in bonded warehouses - compared with the peak of 202,955 tonnes in March, analysts predicted. Declines in global copper warehouse stocks added to the bullish momentum on Friday, as the data raised speculation that demand will outpace supply in the near term.
Meanwhile, Chile state copper miner Codelco expects to resume talks with subcontractor workers who have been protesting all week for higher pay and improved working conditions, Interior Minister Belisario Velasco said.