Copper, the industrial metal that serves as a significant economic indicator about the state of global health because of its use for a variety of manufacturing purposes, has remained above $4 per pound for the majority of the year, Dow Jones Newswires reports.
With global supplies running tight, recent labor strikes at copper mines have caused some preoccupations because of the risk of steady demand depleting the global supply, which was not being fully replenished due to labor disputes. That a large amount of the supply of the industrial metal derives from Chile also is notable because of the nation's dramatic history with mining.
Ranging from laptops to air conditioners to vehicles, uses of the industrial metal are varied.
"Copper is very economically sensitive, because when the economy slows nobody is building or buying computers," analyst Sterling Smith of Country Hedging told Dow Jones Newswires.
The globe's top consumer of the industrial metal is China, which owns the world's most rapidly developing economy. With that developing economy comes large amounts of domestic growth, which pushes up demand for copper. Or that growth keeps the demand steady.
Labor strikers at the largest copper mine in the globe's biggest producer of the industrial metal prompted a production loss of 40,000 tons during the 15-day period of their protest, according to Voice of America.
Located in Antofagasta, Chile, in the northern part of the country, the Escondida mine resumed production early on Saturday, Reuters reports. The strike had drawn global attention since the loss of production caused already tight supplies of the metal to be pinched. Escondida accounts for 7 percent of the supply of copper around the globe, according to Voice of America.
Collahuasi, the globe's third-largest copper mine, had a 24-hour labor strike during the last weekend of July, Reuters reports. The thrust of the protest was manifesting opposition to the mine's plans to execute large amounts of layoffs. The mine accounts for 3.3 percent of the globe's total supply of mined copper.
Labor strikes pertaining to copper have caught Chile by surprise because they encourage and feed a reputation for volatility and unpredictability with labor issues. This previously was foreign to Chile, which is one of Latin America's most stable economies.
But it also raises an economically risky situation. Because both protests occurred around the same time, workers led by unions are prone to launch follow-up protests with or without reason and warning.
The work stoppage at Escondida was more concerning because that mine is so much larger and the duration of the loss of production was so much longer.
The Associated Press reports BHP Billiton, the English-Australian owner of Escondida offered production bonuses roughly equal to $5,640 per year, which is about half of what striking laborers had demanded.
The company clearly saw that it had to settle the strike as during that 15-day period it lost about $400 million in production that just never happened.
Almost two-thirds of striking workers accepted the deal, Voice of America reports.
Production of the industrial metal is struggling to keep current with a global demand that is gradually increasing, which seems to project positive news about potential growth throughout the copper market. This year and next year might see shortfalls of the metal.
"When you look at a metal like copper and its pure industrial use, it's not ready to make the turn and start working its way back up," analyst Scott Meyers of Pioneer Futures told Dow Jones Newswires.
The protest arrived at a key time as Chile on Friday marked the one-year anniversary of the beginning of last year's dramatic two-month-long survival at another mine in the nation, MSN reports. Thirty-three miners' lives changed forever by the trying situation at the San Jose mine in the Atacama Desert.
"We are the survivors of a catastrophe," Luis Urzua, who was the miners' shift leader, said during the event he organized. "Thanks to their efforts, there are not 33 crosses planted in the desert today."
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