Copper Prices Hit Three-week High on Supply Concerns

Copper prices hit a three-week high on Thursday (May 25), supported by supply concerns caused by a production disruption at Freeport-McMoRan’s (NYSE:FCX) Grasberg copper mine, the second-largest in the world.
A union representing an estimated 9,000 workers has extended a strike at the mine for a second month due to an ongoing dispute over employment terms and layoffs. Freeport said 4,000 of them are now “deemed to have resigned” as they have not come to work after multiple summons.
Grasberg was hit earlier this year with another stoppage due to a dispute over its export permit with the Indonesian government; it lost two-thirds of its production during a 15-week disruption.
In an effort to ramp up production and reduce costs, the company cut around 10 percent of its Indonesian workforce. Despite disciplinary warnings from Freeport, workers then began a 30-day strike to try to get the jobs reinstated. Tri Puspital, Freeport Indonesia’s union industrial relations officer, told Reuters that the strike has halved Grasberg’s output.
On Thursday, LME copper ended up 0.7 percent, at $5,723 a tonne, after earlier touching $5,768.50, its highest level since May 3.