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Copper price rally resumes on Chile supply disruption concerns

Escondida, the world’s largest copper mine. (Image courtesy of BHP.)

Copper price was up again on Monday, lifted by concerns of supply disruptions in Chile and signs that Chinese demand is picking up.

Copper for delivery in July was up 1.15% Monday afternoon, with futures trading at $4.7065 per pound ($10,354 a tonne) on the Comex market in New York.

Workers at BHP’s Escondida and Spence mines rejected BHP’s final wage offer on Friday, with almost 97% of the union’s members opting to strike, sparking supply disruption concerns.

The union’s 205 workers run the company’s Integrated Operations Centre which manages cathode and concentrator plants in the north of the country from the Chilean capital Santiago.

Meanwhile, concerns over mining investment in South America linger as the leading presidential candidate in Peru wants to impose a similar royalty tax on copper sales proposed in Chile.

Peru’s socialist presidential candidate Pedro Castillo said on Sunday night he would raise taxes and mining royalties and renegotiate the tax contracts of large companies if elected to high office next month.

Click here for an interactive chart of copper prices

Copper’s rally stumbled last week along with other industrial materials after China stepped up efforts to cool the commodities surge that’s fanning fears of global inflation.

Demand in China is recovering after prices retreated, Jinrui Futures Co. said in a note on Monday, pointing to a spike in the domestic spot premium.

Related read: New bull chart for $30,000 copper price: porphyries nearly mined out

Morgan Stanley said the gains in metals, iron ore and grains will decline toward the end of the year after “overshooting levels that can be justified by the fundamentals.”

(With files from Bloomberg and Reuters)

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