Supply concerns for copper eased on Wednesday with BHP Group and the labour union at Escondida mine struck a tentative deal after months of negotiations. The deal eased some pressure on the global copper supply chain shared Yash Sawant Research Associate of Angel Broking.
The ongoing labour negotiations in several mines of Chile had raised supply concerns in the global copper market in times of booming demand. However, the tentative deal at the Escondida Mine, the world’s largest copper deposit, has averted the worries over a potential strike that dragged the prices lower.
Ongoing labour negotiations in several mines of the major copper-producing nations Chile hampered the already tight global Copper market. The approximate mine output in 2020 was 5.7mn mt.
BHP’s Escondida mine, the world’s largest copper deposit & Andina copper mine (operated by state-owned Codelco) located in Chile had rejected the respective company’s offers ignited worries over a potential strike. Escondida mine output stood at 1.18mn mt of copper in 2020 whereas Andina mines copper output in 2020 was at 184,000mt.
That, coupled with the labour union at JX Nippon Copper’s Caserones mine walking off the job on Aug 10 after the workers and the company failed to bridge the gaps despite government mediation. Caserones copper production stood at 126,972mt in 2020.
The official copper cash contract has dipped by $316/mt since the beginning of August to $9,421/mt on Aug 11.