LONDON: The price of copper on Monday hit its highest level since May 2015, extending the previous session's near 5 percent surge after shipments from the world's two biggest copper mines were disrupted.
The price rose to as high as $6,204 a tonne in Asian trading hours on Monday in volumes of around 8,000 lots, more than double typical trade levels for the time of year. Three-month copper on the London Metal Exchange closed up 0.3 percent at $6,106 a tonne.
"Copper has managed to break higher from its recent range with the supply disruptions from two major producers," Saxo Bank's head of commodity strategy Ole Hansen said.
"Traders will be looking for support at $2.73/lb and $6,000 respectively, while looking for resistance at $2.84," he said. "A prolonged disruption will result in the market beginning to talk about $3/lb ($6,615 a tonne)."
A strike at the world's biggest copper mine, Escondida in northern Chile, entered a fifth day on Monday with little sign of an imminent resolution. A strike began at the facility, operated by BHP Billiton , after wage talks failed to end in agreement.
On Friday BHP said that it would not be able to meet its contractual obligations on metal shipments two days into what was gearing up to be a prolonged stoppage.
"We estimate that 100,000 tonnes of copper production per month from Escondida is at risk," Jefferies said in a note. "Based on comments from union officials, BHP and the union are not even close to an agreement."
Meanwhile, Freeport-McMoRan Inc said an Indonesian export ban remained in place at its Grasberg copper mine, the world's second largest, because it had yet to reach agreement with the government on a new mining permit.
That came against a backdrop of encouraging demand signals from China, which posted much stronger than expected trade data for January as demand picked up at home and abroad.
The wider markets are also starting to reflect a return of so-called "Trump trades", or bets that the new US president's plans to cut taxes and boost spending will fuel economic growth. That sparked a 12 percent rally in copper in the three weeks following the Nov. 8 election.
LME zinc closed down 0.3 percent at $2,916 a tonne, while lead ended the day 0.8 percent higher at $2,420, off an earlier 11-week high of $2,458.50.
Aluminium closed down 0.2 percent at $1,871 a tonne, while tin was 2.7 percent higher at $19,995 a tonne and nickel ended up 0.7 percent at $10,730 a tonne.