Chile: Copper prices inch up in June
July 1, 2011
Copper prices rose marginally in June, up 0.8% over May to reach USD 9,301 per tonne (equivalent to USD 4.22 per pound), after prices had moderated for three consecutive months. Despite the June price increase, copper prices remain well below the USD 9,858 per tonne peak recorded in February, which had marked the highest end-of-month level on record. In annual terms, copper prices are up 42.8% higher than in the same month last year. Prices are expected to remain elevated throughout the year, as Chinese copper demand strengthens and supply remains a concern. On 11 July, labour unions called for a 24-hour strike to protest against the restructuring of the state mine. The strike is expected to affect all six Codelco's mines plus a refinery. In addition, on 5 July, the Collahuasi mine operator announced that adverse weather conditions had disrupted output without giving details; however, unions calculated a 30%-40% loss in output. These events are likely to stoke supply concerns, exerting further upward pressure on copper prices. On the other hand, Xstrata Plc, one of the Collahuasi mine owners announced on 1 July that copper production will increase in the second half of the year to meet its annual output target, as the mine prepares to reopen its port in northern Chile after an incident forced its closure in December last year.