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REUTERS
London, Aug 22: Continuing uncertainty over whether Canada's Highland Valley mine will reopen clouded prospects for copper, which is supported at $1,620, dealers and analysts said last week. The union at the 170,000 tonnes per year mine, which has been shut since May, voiced disappointment on Thursday over a new contract offer from management, a mine spokesman said.
"The union has been indicating that they wanted to take a day or two to formally respond, though initially they are expressing disappointment that it's not what they hoped it would be," a Highland Valley spokesman told Reuters. A strike at ports in Chile was largely over but a union official said on Thursday that workers could strike again if a deal to end a stoppage at the northern port of Iquique was not reached soon.
Technically, copper had some support at $1,650 a tonne and stronger underpinning at $1,620, analysts said. Aluminium faced some danger of a breach of support at $1,450 after the rebuff of its upward attempts over $1,480earlier this week, although some analysts anticipated scale-down buying further down.
COPPER: "Whilst nearby support remains apparent at $1,650 the more important $1,620 level is being targeted," LME brokers Brandeis said in a report. "With profits on longs secured it may prove an ideal level at which to re-establish for the coming session," Brandeis added. ScotiaMocatta said a short-term pull back looked likely to the $1,625-30 level, but this should be a buying opportunity. Rudolf Wolff & Co analysts said they expected copper to come under further selling pressure.
"But should support at $1,645 not be broken down in the morning session, Wolff would be wary of a bout of shortcovering strength ahead of the weekend close." Resistance was generally placed at $1,670/80 with $1,700 above there. At 0818 GMT three months LME copper was quoted at $1,656/60, up from Thursday's late close.
ALUMINIUM: Aluminium showed some resilience on Thursday, closing only a little lower, but appeared to facedifficulty in resuming the upward drive attempted earlier this week. "On the charts the market appears to have a bit to do in terms of re-establishing momentum to get the price to challenge $1,480," Brandeis said. "More likely is a potential breach of the the 30-day moving average around $1,450," it said, adding that scale-down buying would kick in around $1,420.
ScotiaMocatta said aluminium was ranging between the 10-day and 30-day moving averages, and one or two days of closes below the 30-day at $1,447 could prompt more major long liquidation. "Closing back above the 10-day ($1,470) should yield a new high," ScotiaMocatta said. It added that it was looking for weakness first.
At 0820 GMT three months aluminium was quoted at $1,462/64.5, little changed from Thursday's late close.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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