SINGAPORE, Jan 31 - Shanghai copper futures rose 1.4 percent on Wednesday, paring the previous days' 4 percent fall, supported by a strike vote by workers at a copper mine in Chile.
The most active April contract was up 720 yuan at 52,630 yuan ($6,769) a tonne at the midday break.
"Shanghai copper rose this morning on the news that workers at the Cerro Colorado copper mine rejected the pay offer," said Cai Luoyi, analyst at China International Futures in Shanghai.
"That prospect may offset the trend of rising warehouse stocks in London."
Workers at Chile's 115,000 tonne-per-year Cerro Colorado copper mine voted to reject a final pay offer from owner BHP Billiton late on Tuesday.
The current contract expires on Wednesday and a union leader said a strike could start as soon as Friday. However, BHP Billiton may request an additional five days under Chilean law to seek a resolution. [nN30389193]
"We have not seen the end of union militancy in the mining industry. They know how much money the companies are making and want their slice," a dealer in Singapore said.
He added that strong growth, strikes and project delays meant copper prices could firm again after falling sharply early in 2007.
"The numbers out of China last week were pretty robust. Admittedly, stocks are up sharply and there is more supply coming on so we may not see $8,800 a tonne again. But can we keep bouncing off $5,500? Could we see $6,500? The answer to both questions is probably yes."
Copper for delivery in three months on the London Metal Exchange was up $35 at $5,675 a tonne by 0416 GMT. Copper prices have fallen 35 percent from May's record high of $8,800.
LME stocks fell 3,275 tonnes to 210,400 on Tuesday, but remain twice as high as a year ago.
Nickel was down $50 at $35,600 a tonne as investors waited for progress in labour negotiations at a smelter in Canada.
Talks between Xstrata Plc and the union representing workers at its nickel operations in Sudbury, Ontario, were progressing, the company said on Tuesday. [nN30333084]
"The negotiation process still proceeds," said Ian Hamilton, a spokesman for Xstrata Nickel. "Progress has been made to date. There are still areas where the parties remain apart."
If the parties fail to reach an agreement by the time the current contract expires at midnight on Wednesday, more than 1,000 mill, mine and smelter workers may walk out.
"The situation in nickel is precarious. If they walk out, the market will spike. Anything even slightly bullish for nickel seems to lead to a $2,000-price jump," the Singapore dealer said.
Sudbury produces around 60,000 tonnes, or 4 percent of the world's nickel annually.
Nickel hit a record $38,950 on last Friday, up 16 percent from the start of the year and around three times higher than at the end of 2005.
Stocks in LME warehouses were unchanged at 4,278, of which 1,680 tonnes are earmarked for delivery, leaving 2,598 tonnes to support the 1.4 million tonne-per-year market.
The most traded April Shanghai aluminium futures contract rose to 19,270 yuan from 19,210 yuan. LME aluminium was up $19 at $2,714.
"Aluminium is in a tight range with support at $2,700," a dealer in Tokyo said.
"But the cash-to-threes spread is easing. It was over $100 at the start of this week and now it is $90. That is not bullish and the push higher may be faltering."
Base metals prices at 0416 GMT
LME Cu 5675.00 35.00 +0.62
SHFE Cu* 52630.00 720.00 +1.39
LME Alum 2714.00 &nbs
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