BLBG: Copper Slides on Speculation Over Escondida Talks, Rio Outlook
Copper slid in New York and London on speculation that workers at Escondida in Chile, the world’s largest copper mine, will accept a pay offer and as Rio Tinto Group said demand in the U.S. and Europe was yet to recover.
Workers are receptive to BHP Billiton Ltd.’s offer to increase wages, averting a potential strike in December when their contracts expire, union spokesman Zeiso Mercado said yesterday. The union will inform management of a decision today, he said.
“There is some talk they might find an early agreement,” said Barbara Lambrecht, an analyst at Commerzbank AG in Frankfurt.
Copper futures for December delivery fell $2.85, or 2.9 percent, to $2.7755 a pound by 9:05 a.m. on the Comex division of the New York Mercantile Exchange. The metal for delivery in three months on the London Metal Exchange dropped 2.9 percent to $6,098 a metric ton.
China, the world’s largest copper buyer, probably reduced copper imports in September, Lambrecht said. The country’s purchases of copper and related products fell 20 percent to 325,098 tons in August compared with a month earlier.
“We have seen two months in a row of sharp slowdown in import demand,” she said. “We are expecting another fall” to be reported tomorrow.
Prices of copper in New York have more than doubled this year on increased imports from China. The U.S. is the second- largest user of copper.
Rio Demand Outlook
Prices also fell today as Rio Tinto, the company that owns stakes in the world’s two biggest copper mines, said demand for the metal in the U.S. and Europe has yet to rebound.
“The U.S. has bottomed out but we’re not seeing a pickup in demand yet. For the next 6 to 12 months we are somewhat cautious on the market,” Bret Clayton, chief executive officer of Rio’s copper business, said today in an interview in London. “Some expected a pickup in demand when restocking took place. We haven’t seen that yet and we probably don’t anticipate that until later this year.”
Among other LME metals for three-month delivery, lead slipped 0.6 percent to $2,275 a ton, aluminum fell 4 percent to $1,870 a ton, zinc dropped 3.6 percent to $2,020 a ton and tin declined 2.9 percent to $14,250 a ton. Nickel was down 1.7 percent at $18,500 a ton.
