Copper rises as Chilean mine strike continues

AP News
Posted: Jul 28, 2011 4:06 PM
Copper rises as Chilean mine strike continues

Copper prices rose Thursday a labor strike continued for a sixth day at the world's largest copper mine.

Copper for September delivery rose 2.3 cents Thursday to settle at $4.4695 a pound.

The strike at La Escondida mine in northern Chile comes as global copper stockpiles are already in short supply.

Escondida is majority-owned by Australia's BHP Billiton Co., and produces about 7 percent of the world's copper. The strike has reduced production by 18,000 tons at a cost of $180 million. Escondida has said it may not be able to honor its copper contracts for reasons beyond its control.

"The market has very little slack to deal with a prolonged strike," Barclays Capital analysts wrote in a note to clients.

Other commodities were mixed as investors remained focused on the tense debate in Congress over how to avoid a U.S. debt default next week. The Treasury Department says the government won't have enough money to cover all its bills after Tuesday unless an agreement is in place to raise the country's borrowing limit.

Lind-Waldock senior market strategist Phillip Streible believes investors are growing more confident that a deal will be reached. "Investors must believe that a plan will be submitted and approved very soon," he said.

Gold for August delivery fell $1.70 to settle at $1,613.40 an ounce, September silver dropped 77.4 cents to $39.794 an ounce, October platinum fell $15.60 to $1,792.40 an ounce and September palladium dropped $5.10 to $828.10 an ounce.

In other trading, agricultural and energy contracts were mixed.

September wheat fell 11.5 cents to settle at $6.9325 a bushel, December corn fell 5.25 cents to $6.8625 a bushel and November soybeans lost 9 cents to $13.715 a bushel.

Oil prices settled up slightly as traders waited to learn more about the possible impact of a tropical storm in the Gulf of Mexico.

Tropical storm Don formed near Mexico's Yucatan peninsula Wednesday and is expected to make landfall near Corpus Christi, Texas, on Friday night or Saturday morning.

Benchmark crude for September delivery rose 4 cents to settle at $97.44 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil rose 2 cents to settle at $3.1144 per gallon, gasoline fell 1.93 cents to $3.0638 per gallon and natural gas fell 7.4 cents to $4.244 per 1,000 cubic feet.