SHANGHAI, Jun 6 (SMM) – A potential disruption in supply from domestic environmental reviews and a declining US dollar buoyed prices of SHFE copper recently, SMM senior analyst Ye Jianhua believed.
The SHFE copper 1808 contract jumped over 2% to close at 53,320 yuan/mt on Wednesday June 6. LME copper currently stands at around $7,150/mt, with gains of 5% in the last four consecutive trading days.
The US dollar weakened and fell below 94 last night to close at 93.86, as the euro rose.
As of Wednesday June 6, six inspection teams from the central government have stationed in Hebei, Henan, Inner Mongolia, Ningxia, Heilongjiang, Jiangsu, Jiangxi, Guangdong, and Yunnan for month-long review on previous rectifications.
This is expected to affect operation across producers of blister copper that use copper scrap as raw materials. Copper processing plants will be little impacted, SMM learned.
Separately, supply concerns amid wage negotiations at the world's largest copper mine, Escondida in Chile, had limited impact on copper prices, Ye believed. There is little indication that the 43-day strike from last year will occur again this year, he said.
In the third round of labour contract negotiations, the union demanded a one-time bonus equivalent to 4% of dividends distributed to BHP shareholders.
That would be translated to about $34,000 per worker, the biggest bonus ever made to Chilean mineworkers.
Reactions to the proposals are likely to be cool after two rounds of failed talks. BHP will respond before next Friday.
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