Copper prices have seen a strong rebound. The weekly and monthly numbers are positive. This is because Chile is facing quite a bit of labour negotiations right now.
Two unions in Codelco mines went on strike, which starts from today, August 13. JX Nippon Copper Caserones mine is also striking as labour contracts with the employers have failed.
Positive news is from Escondido, where the labourers have struck a deal with the employers so that work continues to be on. But the important point is that Chile, which is the largest producer of copper in the world, is headed for 40 labour negotiations in the second half of this year. At 5.7 million tonnes, Chile produces nearly 28.5 percent of the world’s copper production and the markets would be keenly watching for every labour conversation that goes in.
So as of now, we have 5-6 on board, but 35 are still remaining for the rest of this year. Also, 60 percent of Chile's copper is going to be impacted by these labour negotiations. These mines represent 17 percent of the global copper production as well, and copper clearly accounts for nearly 10 to 15 percent of Chile's GDP. So this is going to be in focus and any threat on copper production coming in from Chile would continue to support copper prices, going forward.
While the demand has been strong, but it is the supplies that the markets are going to be keeping an eye on.