24H Copper - US $3.9182lb UP $0.0775
April 2 (Bloomberg) -- Copper advanced in London, snapping a three-day slide, as workers considered a strike at Codelco in Chile, the world's largest producer of the metal. Aluminum fell.
April is a ``good month'' for a strike, La Segunda newspaper reported yesterday, quoting Cristian Cuevas, president the Confederation of Copper Workers in Chile. Labor unrest at mines in Latin America helped buoy copper prices last year.
``The main thing we're watching is the threatened strike in Chile,'' said Dan Smith, an analyst at Standard Chartered Plc in London. ``The same group struck in June and July last year and it did actually impact production.''
Copper for delivery in three months increased $45, or 0.5 percent, to $8,390 a metric ton as of 3:14 p.m. on the London Metal Exchange, after falling 1.9 percent in the previous three days. The contract has gained 26 percent this year.
Testimony by Federal Reserve Chairman Ben Bernanke today in Washington may spur speculation of more interest-rate cuts, reducing the value of the dollar and buoying copper, said David Thurtell, an analyst at BNP Paribas SA in London. U.S. gross domestic product may contract in the first six months this year, Bernanke said.
``He's going to do what he can to shore up growth and cut rates if need be, and that will almost certainly be dollar bearish,'' Thurtell said. The dollar halted a two-day advance that contributed to lower prices for copper and other commodities.
Copper supplies will probably fall short of demand by 106,000 tons in the second quarter, compared with a deficit of 112,000 tons in the first quarter, said Gayle Berry, an analyst at Barclays Capital in London. Disruptions to mining supply including from strikes may equal 3 percent of production this year, up from an average of 2.5 percent, she said.
Copper Stockpiles
LME copper inventories rose 725 tons to 112,075 tons, the first increase since March 17, according to the exchange's daily warehouse report. They have declined 43 percent this year.
``I'm relatively bullish for copper mainly because the fundamentals are still tight and they're going to be tight for some time,'' Smith of Standard Chartered said. The metal may average $8,000 a ton in the second quarter, he said, compared with $7,741 in the first quarter.
Aluminum fell $11 to $2,949 a ton. Power outages probably will reduce production in China by 350,000 tons this year and another 120,000 tons in Africa, Smith said.
Standard Chartered raised its 2008 aluminum forecast to $2,693 a ton, from $2,625 a ton.
Tin increased $50 to $20,100 a ton, nickel declined $350 to $29,000 a ton, lead gained $75 to $2,850 and zinc dropped $20 to $2,300 a ton.
