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Copper price extends decline despite possible Chile strike

Salvador copper mine. (Image courtesy of Codelco.)

The copper price extended its decline on Friday despite the prospect of a strike in the world’s biggest producer Chile and signs of improvement in top buyer China’s economy.

Copper for delivery in July fell 2.5% from Thursday’s settlement, touching $4 per pound ($8,800 per tonne) Friday morning on the Comex market in New York.

Click here for an interactive chart of copper prices

The union said that workers at Chilean State-owned Codelco, the world’s largest copper producer, will go on strike if they do not receive a favourable answer from the company’s board of directors. 

The union has insisted that Ventanas, in the central zone of the country where the smelter is located, needs $53 million worth of capsules to retain certain gases, allowing operations to continue while being environmentally compliant.

Meanwhile, data showed that Shanghai’s economy contracted for a second month in May at a somewhat slower pace, weighing on the commercial hub’s recovery prospects following a two-month covid lockdown. 

Related: Chile tax reform, mining royalty ‘priority number one,’ Minister says

“Industrial metals are really not sure what direction to take on China. One day there’s a headline saying everything’s opening up. The next day there’s a partial close-down again,” said Caroline Bain, chief commodities economist at Capital Economics in London.

(With files from Reuters)