Strikes raise metal prices<\/p>\n
LONDON (AFP): Strikes in several copper and nickel mines
\naround the world sent a shiver of excitement through the market,
\nwhich was still awakening from a sleepy summer, and drove the
\nprice of these metals higher last week.<\/p>\n
Some traders fear that the stoppages at copper mines in Chile
\nand Namibia will cut into world production, which was expected to
\nexpand strongly later this year.<\/p>\n
A walk-out at a nickel mining complex in Canada also threatens
\nto reduce output of this key metal, used to make stainless steel.<\/p>\n
Strike action in several mines around the world has prompted
\nfears on the London Metal Exchange (LME) of a disruption to
\nglobal supplies.<\/p>\n
Prices, as a result, have been driven higher. Three-month
\ncopper prices rose by US$30 to $1,965 per ton.<\/p>\n
The main source of concern is in Chile, where employees at the
\nstate-owned Codeldo's Salvador mine stopped work from Friday, in
\nprotest at a management restructuring plan.<\/p>\n
Salvador, with an annual output of 85,000 tons a year, is the
\nsmallest mine run by Codelco, which is the world's biggest copper
\nproducer.<\/p>\n
The market fears that the stage is set for a long strike, with
\nthe management apparently determined not to give way in the
\ndispute.<\/p>\n
Strike action has also put the Tsumeb smelter in Namibia out
\nof action. The owner, Gold Fields, has admitted that there might
\nbe a lengthy shutdown.<\/p>\n
Another dispute could take place at a mine in New Mexico owned
\nby Phelps Dodge, where unions are resisting the latest management
\npay offer.<\/p>\n
Analysts, however, are divided on the impact of these labor
\ndisputes. Some say that the copper market is swiftly moving
\ntowards a period of large surpluses (because of rising
\nproduction) and the strikes will have a minimal effect.<\/p>\n
But other experts believe the loss of output could delay the
\narrival of these growing surpluses.<\/p>\n
An increase in US construction activity helped prices to firm.
\nCopper is used a lot in the building industry, to make pipes and
\ncables.<\/p>\n
At the end of the week, a smaller-than-expected rise in LME
\nstocks (up 3, 600 tons to 275,275 tons) gave added impetus to the
\nmarket.<\/p>\n
Nickel prices were hard. A vote in favor of strike action at
\nthe Thompson mining complex in Canada owned by the giant Inco
\ncompany drove up the price of this metal, used to make stainless
\nsteel.<\/p>\n
The three-month reference price gained $100 to reach almost
\n$7,500 per ton. Traders fear that the shutdown of this complex in
\nManitoba, which produces 45,000 tons of nickel a year, will
\naffect supplies on the market.<\/p>\n
The price of tin rose by $80 to $6,240 per ton, with LME
\nstocks up 20 tons at 10,725 tons.<\/p>\n
According to the Economist Intelligence Unit, consumption of
\ntin will grow strongly in the next few years, after the decline
\nseen in past years, as tin is increasingly used once again to
\nmake drink cans.<\/p>",
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