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LONDON (Thomson Financial) - Copper was higher on dwindling stocks and as mine-strike threats lingered, but gains were capped because the seasonally busy second quarter is coming to an end.
Stocks of the red metal stored in LME certified warehouses across the globe fell 1,675 tonnes to 114,700 tonnes, said the exchange in a daily report. The Shanghai Futures Exchange said its copper stockpiles fell 5.6 pct to 90,617 tonnes in the week to June 29.
At 11.02 am, LME copper for three-month delivery had risen to 7,619 usd per tonne against 7,541 usd yesterday.
Prices were further supported by strike threats in South America.
Copper continued to take support from news that workers at Collahuasi, Chile's third-largest copper mine, had voted in favour of strike 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.
'The market is just lurching from one strike to the next,' said ABN Amro analyst, Nick Moore. 'In fact, most of them have lasted a short time and settled but it's been enough to keep the price (supported).'
He added that because today is the last day of the second quarter and the final day in June, trading will bring 'a day of shenanigans'. 'As they come back on Monday, it will be a different picture,' he added.
Elsewhere, nickel took another sharp hit, battered by technical selling and on continued speculation that EU and Chinese steel producers are likely to reduce the amount of the grey metal they use. Stainless steel producers use about two-thirds of the global nickel supply.
A lack of buying interest yesterday left the alternative of further weakness creeping in, said Triland analyst Roy Carson.
Nickel has lost some 30 pct since May when prices reached nearly 52,000 usd.
Prices dipped today even after the LME reported that stocks fell 156 tonnes to 8,910 tonnes, in a daily report. LME nickel stocks have risen 200 pct, however, since hitting a low of 2,982 tonnes on Feb 6.
'We suspect there is more upside to LME nickel inventories and thus more likely pressure on both short-dated nickel prices and backwardation,' said UBS analyst John Reade.
Backwardation refers to when the spot value is higher than futures contracts prices.
Nickel was down at 35,500 usd from 36,800 usd yesterday.
In other metals, lead was up at 2,690 from 2,645 usd yesterday, aluminium was up at 2,752 usd from 2,740 usd while zinc was flat at 3,390 usd. Tin was slightly higher at 13,950 usd from 13,900 usd. anealla.safdar@thomson.com as/jag/as/cm2 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.