London Metals Exchange prices closed on a steady note Monday following news of workers at Xstrata's Altonorte smelter going on strike and continued supply worries for the nickel and tin markets, traders said.
After LME copper prices broke key levels of support Friday to sag to a six-month low, participants feared a further retracement on year-end liquidation and short selling.
Prices initally moved up to an intra-day high of $6,735 a metric ton basis three-month on the news of Altonorte workers going on strike, but a company statement that output won't be affected resulted in prices drifting back below the $6,700/ton mark.
However, given that contract negotiations at Coldelco's largest Norte division are still ongoing – with news of two union factions rejecting one company offer – copper prices should find some support, a broker said.
"Unions seem to be price-sensitive. They have seen that prices have come off a good $2,000/ton from the highs and that the outlook is easing on the demand side. They are under pressure to get the deal through before prices drop further," the broker said.
LME copper will likely stabilize until the labor issues are resolved, analyst Edward Meir at Man Financial said, also noting the market was "relatively oversold."
LME nickel held up well to gain on the day, given a raft of supply problems and project delays.
These include delays at BHP Billiton Ltd.'s Ravensthorpe mine in Australia and CVRD's Goro mine in Indonesia, as well as the likelihood of reduced output at PT International Nickel Indonesia's nickel mine due to energy problems, are underpinning an already tight market.
LME nickel stocks remain at very low levels, preventing participants from going short, with stocks at only 7,182 tons of which 2,010 tons are cancelled warrants, meaning the metal will leave the warehouse soon.
LME tin continues to draw support from the mine shutdowns in Indonesia, where the government has cracked down on small-scale miners lacking permits.
Some of these illegal miners allegedly feed the country's second-largest PT Koba smelter, which is under police investigation. Malaysia Smelting Corporation Bhd. (5916.KU) owns 75% of PT Koba.
The crackdown in October has sent tin prices to record highs and is likely to keep prices high due to lost production.
LME zinc was "impressive" Monday, a trader said, relying on its bullish fundamentals.
3 months metal (prices in dollars a ton)
Bid – Ask, Change from Friday PM kerb
Copper 6665.00-6670.00 Up 35.00
Lead 1674.50-1675.50 Up 24.50
Zinc 4340.00-4345.00 Up 25.00
Aluminium 2787.00-2788.00 Dn 15.00
Nickel 34025.00-34050.00 Up 320.00
Tin 11110.00-11125.00 Up 85.00
豫公网安备41010502003434号