SINGAPORE, June 20 - Shanghai copper rose on Wednesday in tandem with an early pick-up in London prices as investors watched to see how a series of strike threats played out.
The most-active September copper contract on the Shanghai Futures Exchange rose to 64,760 yuan ($8,502) a tonne at midday, from 64,480 yuan on Monday
"Copper prices are ranging, but I think they could fall rapidly in the next six weeks," a trader at a leading Chinese copper smelter said.
"There is no buying from domestic fabricators when Shanghai prices move above 65,000 yuan," he said, adding that copper prices in London could drop to $6,000.
Copper for delivery in three months on the London Metal Exchange gained $35 to $7,465 at 0401 GMT.
Dealers said markets would tread water, waiting for a series of threatened labour disputes to come to a head, most notably at the world's largest copper miner, Chile's Codelco.
"People are waiting to see what happens at Codelco. If the contractors walk out, there could be a bit of a push up in prices," Australia and New Zealand Bank analyst Andrew Harrington, said.
Workers at Chile's Collahuasi, one of the world's largest copper mines, have set a strike vote for June 27, barring an improved wage offer from the company. The 689-member union is demanding improved health and education benefits and a retroactive share of soaring company profits.
At other Codelco operations, sub-contractors plan to meet on Thursday to give the final go-ahead to a strike across Codelco's five divisions.
Cristian Cuevas, a spokesman for the umbrella group of Codelco's 30,000 subcontract workers, said the meetings will have the express purpose of ratifying the strike.
Managers at the Canadian Copper Refinery in Montreal are trying to ramp up production to around 35 percent of capacity after a strike resulted in force majeure at the plant which produced around 300,000 tonnes of copper last year.
In Peru, workers at Southern Copper's two copper mines and a smelter plan to strike from June 23.
STAINLESS CUTS DEPRESS NICKEL
Nickel was up $200 at $37,800 following Tuesday's 7 percent plunge after Chinese stainless producers said they were considering trimming output.
"It is very likely that we will have a production cut," said an official at a Chinese unit of South Korea's POSCO . His company could cut production by 20 to 30 percent, he said, although he did not indicate a timeframe or what actual production levels might be.
"One of the interesting things is the talk from China's stainless steel mills that they may cut production by 20 percent," ANZ Harrington said.
"That is hurting nickel prices but it remains to be seen whether they can deliver on any promised cuts. This is probably more a message for Beijing that they are addressing concerns about the rapid expansion of the industry."
Two-thirds of all nickel mined is used to make stainless steel and expectations of strong demand from Chinese steel makers helped prices to a record of $51,800 in May.
CHINA TAX CHANGES
Dealers were also digesting a move by China to remove or reduce tax rebates on nearly 3,000 export categories, including some metals products, textiles, shoes and other manufactured goods.
The changes could temporarily stem a flood of exports, particularly of steel and aluminium products, that has helped widen China's trade surplus to $216.7 billion in the 12 months through May, and raised hackles in the United States and Europe.
The changes will take effect from July 1. For a FACTBOX on the rebate changes, please click on [ID:nPEK211274].
LME aluminium was up $8 at $2,714 after a steady performance on Tuesday in contrast to most other metals. Shanghai September aluminium eased 40 yuan to 19,290 yuan.
Metals prices at 0401 GMT
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