Copper falls as mine stir ends

Copper dropped in London after a four-day protest at Indonesia's Grasberg, the world's second largest copper mine, ended over the weekend. Tin and nickel gained.

Copper surpassed the $8,000-a-metric-tonne mark last week for the first time in seven months on speculation that a labour dispute at the Freeport McMoRan Copper & Gold mine, which contributed 3.6 per cent to world supplies last year, would have cut supplies.

The workers and the management settled the dispute on April 21. The settlement was "significant,'' Jon Bergtheil, head of global metals strategy at JPMorgan Securities in London, said today by phone. "Grasberg was key to copper's gains to $8,100 last week.''

Copper for delivery in three months on the London Metal Exchange, fell $59, or 0.7 per cent, to $7,896 a metric tonne as of 10:35 am local time. The contract rose 3.2 per cent last week, the seventh weekly increase.

The declining inventories and increased imports into China, the world's largest user, are likely to cap copper's drop. The stockpiles monitored by the LME fell for the sixth consecutive session to 168,150 tonne, the LME reported today. That's the lowest since December 12.

China more than doubled imports of the metal in March to 208,014 tonne, according to data issued by the Beijing-based customs office today. That's the highest since atleast January 2004, according to Bloomberg data.

Southern Copper

Workers at Southern Copper Corp.'s Ilo smelter in Peru will probably start a strike as early as April 28 after they rejected a wage offer from the company, Jesus del Castillo, a spokesman for the Mining Federation, said on April 20. The federation is a Lima-based group of unions that represents about 28,000 mine workers in Peru.

Southern Copper will petition the Labour Ministry to declare the strike illegal since workers ignored standard procedures before breaking off talks, company spokesman Alberto Giles said in a phone interview from Ilo, 850 kms (530 miles), southeast of Lima.

The price of copper will probably rise as inventories dwindle and the demand from China grows, Robin Bhar, an analyst at UBS, said today by phone from London. "Zinc is also our favorite'' for the same reasons, Bhar said.

Zinc stockpiles monitored by the LME dropped 1,525 tonne, or 1.5 per cent, to 99,175 tonne, the lowest since March 15.

The contract for delivery in three months was unchanged at $3,680 a tonne.

Nickel gained $800, or 1.6 per cent, to $49,500 a tonne, close to the all-time high of $50,150 a tonne on April 10.

Imports of the metal into China, the world's largest user, gained 5.5 per cent in March to 7,740 tonne compared with the same month last year, according to the government data. For the first three months, imports jumped 47 per cent on year-to-year basis.

Tin gained $75, or 0.6 per cent, to $13,750 a tonne, after declining 4.7 per cent last week.

China, the world's largest tin producer, more than doubled exports to 4,540 tonne in March, according to government data released today. The exports increased as the price of tin gained 21 per cent this year, trading at an 18-year high of $15,100 on April 18. The stockpiles of the metal monitored by the LME rose 90 tonne to 8,845 tonne, close to a 17-month low of 8,710 reported on April 19.

Lead was unchanged on the LME at $1,980 a tonne and aluminum gained $3 to $2,845 a tonne.