(Bloomberg) — A strike at a major copper mine isn’t getting a lot of attention from investors, but it could end up packing a big market punch.
As the market focuses on trade wars and geopolitical tensions, thousands of workers downed tools at top copper-producer Codelco’s Chuquicamata mine in Chile on Friday, according to Liliana Ugarte, president of Union No. 2. A prolonged stoppage would tighten global supply in a market where output is already expected to trail demand this year, analysts say.
A majority of members of Unions No. 1, 2 and 3 at the mine rejected the company’s last offer for a labor contract in a freehand vote on Wednesday evening. A strike started at the Santiago-based company’s third-largest mine at 5 a.m. local time. Copper futures in New York settled lower on Friday as growth worries outweighed supply risks against growth worries.
“This will have an impact — Chuquicamata represents about 2% of global supply of mined copper,” said Cesar Perez-Novoa, an analyst at BTG Pactual in Santiago. “But right now the market is focusing on the trade war and on geopolitical tensions. The copper market is just not on investors’ radar.”
A stoppage at the mine could mean the metal falls into a wider deficit, estimated for this year at 189,000 metric tons by the International Copper Study Group. Chuquicamata produced 321,000 tons of copper in 2018 and output is expected to remain flat this year.
For the rest of this article: https://ca.finance.yahoo.com/news/copper-mine-strike-may-pack-203421929.html?utm_source=Red+Cloud+KS+Newsletters&utm_campaign=c2cc69cae5-EMAIL_CAMPAIGN_2018_04_10_COPY_01&utm_medium=email&utm_term=0_e31633b621-c2cc69cae5-161473553