(Updating with full report)
LONDON (Thomson Financial) - Copper prices rose, supported by news workers at the Collahuasi mine in Chile, owned by Xstrata, Anglo American and a Japanese consortium led by Mitsui & Co, have voted in favour of a strike.
But gains were capped by uncertainty ahead of a spate of US data, including first-quarter GDP and jobless numbers, due later today.
At 10.47 am, LME copper for three-month delivery had risen to 7,448 usd per tonne against 7,370 usd yesterday.
The red metal was supported by news workers at Collahuasi, Chile's third largest copper mine, had voted in favour of industrial action after rejecting a pay offer from management.
The mine workers' existing contract expires at the end of June. Following the vote, a strike could begin from July 3.
'This could cut mine output straight away and cut off the feed to smelters,' noted UBS analyst Robin Bhar. 'This is a big mine, producing 440,000 tonnes per year of copper. It's being seen in the market as a key factor in keeping prices high.'
Industrial action elsewhere continues to buoy prices. Workers at Xstrata's CCR refinery in Montreal are continuing a strike that has been in place since June 11, with no further talks currently scheduled, analysts said.
Meanwhile, staff at Southern Copper Corp's Toquepala and Cuajone mines and Ilo smelter have agreed to a temporary return to work to allow talks with mediators. However, uncertainty remains over how far production will return to normal.
Protests also continue at Chilean national copper company Codelco, although the company claims the impact on production so far has been negligible.
Attention is now turning to today's US economic data, which includes first-quarter GDP numbers and jobless data.
Gains in copper prices have been capped by relatively lacklustre US factory orders data yesterday, analysts said.
The US Commerce Department said yesterday orders to US factories for big-ticket manufactured goods dipped 2.8 pct in May, the largest drop in four months, as demand for aircraft, heavy machinery and metals all declined.
The department earlier reported a decline in sales of both new and existing homes in the same month, in line with forecasts but doing little to buoy hopes of a recovery in the housing sector.
This afternoon's US first-quarter GDP numbers are keenly awaited by investors looking for signs on the health of the US economy, a major seat of demand for the metal.
'(The data) does affect sentiment and that affects price,' said Allan Trench, an analyst at CRU. 'If we have weak economic data, it will push prices down. Stocks are so tight at the moment that the market is moving on any newsflow.'
LME-monitored stockpiles of the metal declined a further 1,075 tonnes this morning to 116,375 tonnes, the exchange said.
Among other metals, tin for delivery in three months edged up to 14,000 usd per tonne against 13,975 usd, lead climbed to 2,640 usd against 2,590 usd and aluminium rallied to 2,717 usd against 2,590 usd.
Three-month zinc, meanwhile, edged up to 3,381 usd against 3,350 usd, while nickel eased to 37,300 usd against 37,600 usd.
'Nickel remains sensitive to demand from China, especially with regards to potential cuts in steel production in July and the increasing use of laterite ores to produce nickel pig iron as a substitute for refined nickel,' noted Standard Bank analyst Walter de Wet. 'Meanwhile, in the absence of new developments in these areas, we expect nickel to take direction from short-term technical factors.' jan.harvey@thomson.com har/ms1 COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.