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Base Metals
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General Market Commentary
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General Base Metals
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General Market Commentary
Copper price bears shrug $280B China stimulus package
Copper was trading down for a third day on Monday as metal traders in New York shrug off the increasing likelihood of a strike at the world's largest copper mine and the impact of fiscal stimulus in top metal consumer China.
Copper touched $2.76 or $6,080 a tonne on the Comex market, down a stomach churning 17% or $1,270 a tonne since hitting four-year highs early June.
Labour action in Chile and Peru was flagged at the beginning of the year as a catalyst for a higher copper price in 2018, but so far talks have been uncharacteristically smooth, with most agreements reached during early negotiations.
However, a strike at Chile's Escondida, responsible for nearly 5% of primary global copper supply, now looks all but certain. A 44-day strike in February-March last year crippled production at Escondida, which part-owner operator BHP expects will produce more than 1.2m tonnes in 2018.
Reuters reports the union at Escondida is expected to overwhelmingly reject the final contract offer from the Anglo-Australian miner.
Union members have until Wednesday to finish voting on the company's proposal, when the union will conduct an official count. After that, either party can call for a period of government-mediated arbitration that could last as many as 10 days.
"Half our members have voted," said union spokesman Carlos Allendes. "We hope for positive and overwhelming results, with around 80 percent rejecting the offer from Escondida."
Upcoming contract negotiations could also lead to outages at Chile's state-owned Codelco operations which include the Andina, El Teniente, Salvador, Ministro Hales and Gaby mines and the Caletones smelter.