Copper Rises for First Day in Five as Freeport Strike Looms

By Glenys Sim

Oct. 2 (Bloomberg) -- Copper climbed for the first day in five in Asia trading as workers at Peru's third-largest mine plan to go on strike, raising concerns that supplies may be disrupted.

Copper also gained after the U.S. Senate approved a $700 billion financial rescue package which may help stabilize credit markets and restore confidence in the banking system.

``We continue to see copper as well-positioned due to supply-side constraints, which span shortfalls at current mines, delays at mega-projects, and contract cancellations by host governments,'' Citigroup Inc. analysts led by John Hill wrote in a report.

Copper for delivery in three months rose as much as 1.5 percent to $6,250 a metric ton on the London Metal Exchange, and traded at $6,242 at 9:53 a.m. Singapore time.

December delivery copper on the Comex division of the New York Mercantile Exchange added 0.7 percent to $2.81 a pound at the same time. China's markets are closed this week for holidays.

Workers at Freeport-McMoRan Copper & Gold Inc.'s Cerro Verde unit, who staged an 11-day strike in June, will walk off the job a second time later today, union General Secretary Luis Castillo said in a telephone interview.

Ontario workers this week began a strike at Xstrata Plc's Kidd Creek plant on labor issues including benefits. Labor disputes have cut metal output in Peru, Chile and Mexico, helping copper rally 28 percent in the first half of this year.

Gains Lost

Even so, copper erased those gains and is down 6.5 percent for the year on concern a global economic slowdown will crimp demand for the metal used in wires and pipes.

The Institute for Supply Management's factory index dropped last month to the lowest since October 2001, while manufacturing in the U.K. contracted at the fastest pace in 16 years last month.

Among other LME-traded metals, aluminum rose 0.5 percent at $2,425 a ton, zinc climbed 1.1 percent to $1,686, and nickel gained 0.3 percent to $16,000. Lead and tin had not traded as of 10:04 a.m. in Singapore.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net