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Copper faces double supply disruption threat in 2018 - Andy Home

Metal News - Published on Fri, 12 Jan 2018

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Reuters reported that Lomas Bayas copper mine in Chile, operated by Glencore , has just averted a threatened strike. Unionised workers accepted the terms of a new labour contract at the eleventh hour. The number of labour contracts up for renewal this year, most of them in Chile and Peru, is the highest since 2010. The threat to mine supply from strike action looms large, not least at the world’s biggest copper mine, Escondida, where a 44-day walkout last year ended with no meeting of management and union minds.

Analysts have collectively tweaked their supply disruption allowances to factor in the potential for labour unrest this year.

However, copper faces a double disruption threat in 2018. The second comes from the shadows of the copper scrap sector, an important but statistically opaque part of the supply chain.

China’s clampdown on imports of low-grade scrap, “foreign garbage”, has already sent tremors through the plastic and paper sectors.

Now, it looks as if it’s copper’s turn. A new raft of measures, if fully enacted, risks stemming the flow of scrap to the world’s largest volume importer.

To quote Michael Lion, president of Lion Consulting Asia and a seasoned veteran of the scrap trade, “at the very best, there is going to be an enormous dislocation and disruption in the copper supply chain.”

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Posted By : Nanda Koijam on Fri, 12 Jan 2018
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