Copper Rises on Chile Strike Concerns

Copper Futures Prices

The demand and supply equation for copper could soon be in flux, as concerns over the possibility of a miners' strike at the state-owed Codelco’s Chuquicamata copper mine in Chile caused copper prices to surge to their highest price level in 16 months.

Talks evidently broke down today and a strike is tentatively planned for January 4.

Copper prices experienced a record gain in 2009 based on tight supplies and strong demand; especially from emerging markets in need of raw materials to continue building and expansion.

Copper futures prices rose to $3.3465, a gain of 15 cents, a record on the New York Mercantile Exchange’s Comex unit.

China has been the chief driver of copper prices, as they imported a record amount during the first half of 2009, helping to double the price of copper for the year.

With emerging markets faring better than mature economies, copper prices are expected to continue to rise in 2010 as copper demand continues to grow and copper supply remains constricted.

Copper Futures Prices

Chile Copper Strikes Could Cause Prices to Soar

In a strike over pay and benefits, workers in Chile copper mines have created the potential for price increases as global supplies could come under pressure.

Along with the shutdown of Codelco's El Teniente mine, the state also shut down the Salvador and Andina mines over the strike.

The largest underground copper mine in the world, El Teniente, has also been blocked by hostile miners. Chile produces about 40 percent of copper globally.

The copper production in Chile has already been hurt by electric shortages as a nationwide drought has created shortages in hydro-electric power generators, as water levels remain low.

Copper is expected to continue to grow at an annual rate of 3.7 percent through the next ten years, as demaand continues to increase. That would bring consumtion to 27 million tons.

With the slowing housing market in the U.S., China has now become the No. 1 consumer of copper in the world.

Cooper prices have soared by 28 percent so far in 2008, with projections spot copper could end the year at $4.10 a pound, or $9,000 a ton. In 2009, projections are it could reach $10,000 a ton.