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Red hot copper prices are cooling down as BHP works on Chile mine strike

Workers of the Escondida copper mine start an indefinite strike in Antofagasta, Chile, on February 9, 2017.
Juan Rivas | AFP | Getty Images

After rallying to a 20-month high, copper prices are now coming off as a workers' strike shows signs of easing at the world's largest mine of the red metal.

Striking workers at Chile's massive Escondida copper mine and mine operator BHP Billiton said they have agreed to renew talks on Wednesday, Reuters reported, sparking hopes of an early settlement to the six-day stoppage.

Benchmark three-month copper futures on the London Metal Exchange were up 0.3 percent at $6,063.5 per metric ton at 11.25 a.m. on Wednesday morning in Asia, off a 20-month high of $6,204 a metric ton on Monday.

Prices were still supported by another disruption in copper supply at Freeport-McMoRan's Grasberg mine in Indonesia, the world's second-largest copper mine, Reuters reported.

There's 'no stopping' copper now: Analyst

This comes as Indonesia on January 12 introduced rules restricting copper concentrate exports in a bid to boost its domestic downstream smelting industry.

Freeport had said the suspension of the exports would require the Grasberg mine to slash output by around 70 million pounds of copper per month.

It also said that due to limited storage, it would need to cut output to about 40 percent of capacity if it did not get an export permit by mid-February.

President of Bradford Research Charles Bradford told CNBC on Tuesday despite concerns over copper supplies, what was happening in Chile and Indonesia were situations that can be humanly-controlled.

"You can't count on these things continuing. It was like the run-up in coal price earlier last year when the Chinese cut back the operating days (at coal boilers); the price ran up…China decided it was too much, put back the extra days, price is (back down), it happens quickly," he said.

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