LONDON—Copper prices in London and New York rose more than two percent on Tuesday as escalating strike action at world number one producer Codelco and low inventory levels fanned supply concerns.
Tin set a record high of $22,650 a tonne on worries about supplies from top producers China and Indonesia.
Falling stocks of tin in London Metal Exchange warehouses at below 8,000 tonnes, down more than 50 percent since since last August, have also helped prices higher.
Copper for delivery in three months on the London Metal Exchange ended higher at $8,700 a tonne from $8,515 at the close on Monday.
The metal, often used as a key gauge of real economic activity, hit a record high of $8,880 a tonne in London and jumped to contract peaks in New York last week. The surge was triggered by news of the strike in Chile.
The strike at state-owned miner Codelco's Andina and Salvador divisions in Chile has kept the operations shut for the seventh day running a sixth day.
At the New York Mercantile Exchange's COMEX division, copper for May delivery closed up 9.95 cents, or nearly 2.6 percent, at $3.9655 a lb.
"Until the strike is resolved, prices are going to be chopping to the upside," said Sterling Smith, vice president with FuturesOne in Chicago. "As long as we can consistently close above $3.80, we can easily press into new highs."
News that operations at Teniente has also been suspended spurred a fresh bout of buying.
Codelco also said the week-long strike badly damaged the underground copper mine at its Salvador division.
"The strike is one of the only positive factors in the market," Lehman Brothers analyst Michael Widmer said. Stocks of copper have fallen by about 50 percent to below 114,000 tonnes—less than three days global consumption—since the beginning of January.
Negatives
Weak import figures from the world's biggest buyer, China, might have dragged the market lower were it not for the strike in Chile, analysts said.
China imported 126,421 tonnes of refined copper in March, a drop of 37.7 percent on the year and 7.5 percent down on February, customs data showed. Imports in the first quarter were 390,735 tonnes, 19 percent off the same period last year.
"This isn't out of line from expectations as Chinese importers are not keen to bring metal in from abroad," Judy Zhu, commodity analyst at Standard Chartered Bank, said.
But she said Chinese copper consumption remained strong and would grow 8 percent in 2008 to 4.97 million tonnes after rising 16 percent last year.
Tin closed at $22,475/22,500 a tonne, up from $21,650/61,655 at the close on Monday.
"Tin has perhaps the clearest direction of all the complex at the moment with concerns over supplies from China and Indonesia," Standard Bank said in a note.
Aluminium closed at $3,085 a tonne from $3,040/3,042 on Monday, zinc at $2,270/2,271 from $2,220, lead at $2,840 from $2,220 and nickel at $28,900 from $28,450.
Traders said zinc, lead and nickel rose because of short covering—buying back futures sold on the expectation of lower prices in the future.
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