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Copper Hovers Just Above $3, Chile Garners Attention from Investors

December 12, 2017 at 17:36 by Andrew Moran

Copper prices are flat as they are trading just above the crucial $3 threshold. This comes as investors are beginning to comb through reports that Chile has seen the biggest increase in stocks in two years thanks to prices for the industrial metal.

March copper futures rose a tepid $0.0025, or 0.08%, to $3.014 per pound at 16:23 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. After plummeting below $3 last week for the first time since the beginning of October, copper prices were able to pare those losses over the last several trading sessions.

Chile, one of the world’s biggest copper producers, is dominating headlines on Tuesday after the nation’s stocks climbed 2%, the biggest rise in two years. Traders are cheering on higher red metal prices, which have advanced about 20% year-to-date.

The party may be suspended over the next few months as Chilean mine operators will begin to negotiate contracts with 32 unions in 2018. These Chilean mines will represent about 80% of the nation’s copper output, and one-fifth of global production. Should the contract talks fall apart, it could impact production, causing copper prices to surge.

Copper has seen much of its gains from the work stoppages and supply disruptions earlier this year. In Latin America and Southeast Asia, workers have gone on strike, protesting unfair wages. This caused copper prices to spike 10% in one month.

Investors are still keeping a close eye on China, the world’s biggest consumer of copper. There has been mixed evidence pertaining to the Chinese economy. For instance, it was reported last week that there was weaker-than-expected manufacturing data, which briefly affected copper futures.

Traders may have lost hope that governments are going to be investing in infrastructure spending. The US, the UK, China, and Canada have all promised to spend billions on public infrastructure, which would require a lot of copper, but those pledges have yet to be fulfilled.

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