SINGAPORE--Base metals on the London Metal Exchange had a sluggish performance Tuesday, though market participants were monitoring a possible labor strike at Indonesia's Grasberg mine that could trigger a rally in copper to $8,000, traders said.
Copper's narrow trading range limited price movement and trading interest in other base metals, most of which have risen with copper's bull run over the past couple of weeks.
Three-month copper was up $81 on the London PM kerb as of 0620 GMT at $7,810 a metric ton, trading within a $60 range most of the day. Aluminum was up $13 at $2,822/ton, and zinc was $25 higher at $3,525/ton.
Management at PT Freeport Indonesia are scheduled to meet Tuesday afternoon with representatives of Tongoi Papua, an informal group of Papuan employees at PTFI's massive Grasberg mine, to discuss the group's demands on wages and benefits.
Tongoi Papua has said it will hold a peaceful rally involving about 6,000 to 10,000 people on Wednesday if its demands are not met. The Grasberg mine is 90.64%-owned by U.S.-based Freeport McMoRan Copper & Gold Inc, with the remainder held by the government. It produces around 1,800 tons of copper and 9,000 troy ounces of gold a day.
But at the moment, the market doesn't expect production to be disrupted. "Grasberg is only a protest," said a Hong Kong-based trader.
Talk of possible stock rebuilding by China's State Reserve Bureau either in the first quarter or at the moment was circulating the market, but traders said even if any evidence emerges, the market impact has likely already past.
"If such kind of stories emerge, this is outdated," said the head of copper trading at one of China's biggest copper traders.
Few traders believe the SRB is restocking at the moment, although it may have purchased forward shipments.
"Maybe SRB restocked in the first quarter," said the head of copper trading at a large Chinese copper trader. "(But) we can't expect SRB to continue to restock in (the) second quarter at these prices."
Traders said copper may consolidate around $6,800 in the short-term if no fresh fundamental news emerges in the next couple of days, before attempting to breach the key resistance level of $8,000.
Recent Chinese copper data and Chinese GDP data due later this month should provide underlying support to copper, but a rally above $8,000 may be difficult to sustain, said the Shanghai-based trader.
"We can't neglect that the fundamentals aren't as strong as last year, and the U.S. economy isn't as strong as last year, and the European premium isn't as strong as last year," he said.
Aluminum remained traded in a narrow range, capped on the upside by its weaker fundamental outlook but supported on the downside by options activity.
A trader at a Japanese brokerage said aluminum is likely to move toward $2,900 in the short-term, and will be looking to track copper higher. The power outage at one of Alcoa's aluminum smelters in Tennessee Monday may prompt more fund buying, she added.
As of 0620 GMT, nickel had yet to trade in Asia and was unchanged on the London kerb at $46,200/ton; tin was up $25 at $14,525/ton and lead was last quoted at $2,002/ton, down $5 on the London PM kerb, but still untraded in Asia.
豫公网安备41010502003434号