Agoracom

Thought this might be of interest, it certainly looks like Cu is looking to retest the 4.00 mark this could be why.....

Copper Advances in London as Peruvian, Mexican Miners Strike

By Chanyaporn Chanjaroen

July 1 (Bloomberg) -- Copper rose in London as miners in Peru and Mexico went on strike. Aluminum gained.

Peruvian workers started their third national strike in less than 14 months yesterday and Mexico's largest mining union approved a one-hour walkout for this week. Output in Chile, the world's largest copper producer, fell for a third month in May, hampered by a labor stoppage and heavier-than-normal rainfall, the Santiago-based National Statistics Institute said yesterday.

Copper for delivery in three months rose as much as 1.6 percent to $8,645 a metric ton on the London Metal Exchange, the highest intraday price since April 28. It traded at $8,610 a ton as of 4:56 p.m. local time.

``The production will be down this year and we may see a market deficit,'' Kevin Tuohy, a trader at MF Global Ltd., said today by phone from London. ``We're going to see new highs in copper in the second half, perhaps $10,000.''

Copper is in its seventh consecutive year of gains. That's encouraged miners to demand more pay, causing protests at mines from Papua New Guinea to Latin America. Supply growth has also been curbed by declining ore quality at Chile's Escondida and Indonesia's Grasberg, the world's two largest mines.

Mexico's copper output fell 23 percent in April from a year ago because of a strike at Grupo Mexico SAB's biggest mine.

In Peru, lead and zinc mines are also affected by the strike. Only a prolonged protest would boost prices of the metals, said Leon Westgate, an analyst at Standard Bank Plc in London in a report yesterday.

Societe Generale on June 27 cut its estimate for this year's supply of copper-in-concentrate, an intermediate product, by 3 percent, citing strikes and lower-quality ore.

Aluminum Prices

Copper stockpiles monitored by the LME fell 0.2 percent to 122,350 tons, taking this year's decline to 38 percent. Including those monitored by exchanges in New York and Shanghai, stockpiles total 164,766 tons, or 3.2 days of global consumption, according to Bloomberg calculations. Last year's average was 4.9 days.

A weaker dollar will also bolster copper and aluminum prices, Tuohy said.

Aluminum rose $41, or 1.3 percent, to $3,155 a ton. The metal rose 6.2 percent last month, the best performance since February.

Kaiser Aluminum & Chemical Corp., based in Foothill, California, added surcharges to its products from today because of rising prices for energy, the biggest cost for producers.

Natural gas and diesel prices have increased 60 percent compared with last year's averages, the company said yesterday in a statement. The surcharges, effective from today, will be linked to U.S. Department of Energy indexes and updated monthly.

Nickel declined $300, or 1.4 percent, to $21,650 a ton and lead dropped $20 to $1,770. Tin added $100 to $23,550 a ton and zinc dropped $8.25 to $1,923.75 a ton.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

Last Updated: July 1, 2008 12:32 EDT