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Copper prices jumped on Thursday after a union of remote workers for BHP’s Escondida and Spence copper mines in Chile walked off the job, fueling uncertainty over the global supply of the red metal.

The strike at the world’s largest copper mine, and at the smaller Spence comes as copper prices have spiked amid soaring demand as the world’s largest economies revive following more than a year of coronavirus-induced stagnation.

Copper for delivery in July surged more than 3% to $4.677 ($10,310 per tonne) on Thursday afternoon on the Comex market in New York, reversing a downtrend in place since the bellwether metal hit record highs a fortnight ago.

Copper has been drifting lower following threats by Chinese authorities to restrain commodity prices, but their effect has faded and strong demand and tight supply underpin prices, according to Saxo Bank analyst Ole Hansen.

“Copper managed to correct 9% from the peak. That’s a shallow correction. The underlying strength is there,” he said, adding that prices were likely to rise further later in the year.

Click here for an interactive chart of copper prices

On Tuesday, CIBC upgraded its copper forecasts. The bank see copper prices rising to $5.25 a pound ($11,550 per tonne) by end of the year.

“As vaccines continue to roll out, we view a global economic recovery, additional government stimulus, and rising inflation expectations as positive momentum drivers for base metals,” the bank said in the report.

Over the long-term, CIBC sees copper prices averaging $3.30 a pound ($7,260 per tonne).

(With files from Reuters)

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