Copper and the (very) big fund short: Andy Home

LONDON (Reuters) by Andy Home – Peace has broken out in the Chilean copper industry with two major potential labor flashpoints resolved in as many days. Last Friday brought news that the major union at the Caserones copper mine had signed an 11th-hour deal to avert a walk-out. A day later came confirmation of a settlement at Escondida, the world’s largest single copper mine. A year of expected supply turmoil from the large number of expiring labor contracts is turning into a year of unusually trouble-free production. You might have expected the copper price to react negatively to the double news, particularly since traders have been closely tracking every twist and turn of the protracted negotiations at Escondida, fearing another protracted strike after last year’s 44-day walkout. But London Metal Exchange (LME) three-month copper shrugged its shoulders and has over the last 24 hours punched back above $6,000 per tonne, extending a recovery from last Wednesday’s low of $5,773 to a current $6,045. This says much about the extent to which copper has been reacting to macro-economic rather than industry-specific drivers. The bounce from last week’s lows has been accompanied by rising hopes that the United States and China are… continue reading

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