Copper Holds Near Record as Centinela Strike Adds to Chilean Supply Risk
Benchmark copper stayed close to record levels after more than 700 workers walked out at Antofagasta's Centinela mine in Chile, while gold slid to a two-month low on a firmer dollar and elevated yields.
Three-month copper on the London Metal Exchange was down 0.1% at $14,405.50 per tonne, leaving the metal up about 16% for the year. The walkout at Centinela began at 8 a.m. local time after mediation overseen by Chile's Labour Inspectorate failed to resolve a wage dispute, with the Minera Esperanza and Distrito Centinela unions saying the striking employees represent 22% of the mine's direct workforce and will restrict operations. It is the first strike at Centinela, one of Antofagasta's four Chilean operations and a mine that produced 240,400 metric tons of copper last year, and only the second in the company's history.
The dispute centres on pay and benefit differences among employees doing the same job under different union contracts. The unions said the company rejected a proposed mechanism to remove the disparities without offering an alternative, a gap that opened after bargaining schedules were separated from 2020. Antofagasta said it remains willing to continue discussions and does not expect the stoppage to alter its production outlook, but a prolonged disruption would tighten an already constrained market, particularly if labour tensions spread. Supervisors at BHP's Escondida, the world's largest copper mine, are also in government-mediated talks aimed at averting a strike.
Precious metals moved the other way. Spot gold fell 1.2% to $4,113.89 per ounce, its lowest since August 5, while December US futures settled 1.1% lower at $4,140.70. The US dollar index climbed 0.4% and 10-year Treasury yields sat at an over two-decade high, with markets pricing an 85% chance of a rate increase in December. Spot silver eased 3% to $59.86 per ounce, platinum fell 3.9% to $1,635.04 and palladium lost 4% to $1,125.70. Official demand remains a support, with China's central bank extending its gold buying streak to a 23rd consecutive month in September.
The divergence captures the split in the complex: industrial metals are being bid on physical supply risk, with copper drawing support from electrification, AI data-centre construction and grid investment against mine disruptions in the world's largest producing nation, while gold is being repriced for a higher-for-longer rate path. Analysts see scope for one more test lower in gold, possibly toward $4,000, before a year-end recovery, while copper is expected to stay elevated unless mine supply improves materially.