Latin America Trade
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Chile copper, wood pulp, fruit exports slammed by port strikes
Rapidly spreading port strikes in export-dependent Chile are taking a growing toll on copper, fruit and wood pulp shipments in the world’s leading red metal producer, mining and export sources told Reuters.World No.1 copper miner Codelco has said nearly 60,000 tons of its copper is blocked, equivalent to around $500 million in revenue. Global miner Anglo American told Reuters the port strikes have triggered “difficulties for our exports.”
The strikes are a major headache for many of Chile’s miners, which produce roughly a third of the world’s copper and provide around 60 percent of Chile’s export revenue, which is seen at $79.8 billion this year.
The Angamos port in Mejillones launched a strike about three weeks ago to seek a 30-minute lunch break, and other ports have since joined the work stoppage in solidarity.
“This strike can end today or it can last 10 more days,” Angamos union leader Enrique Solar told Reuters.
Chile is losing more than $200 million a day due to the conflict, according to the country’s business chamber.
Roughly 70,000 tonnes of copper are detained at the Angamos port and around 16,000 tonnes are trapped at the Antofagasta port, both in Chile’s north, according to one Chile-based trader. It was not clear how much total copper is currently blocked in the Andean country’s ports.
One shift of workers at the Valparaiso port joined the strike movement on Wednesday, bringing operations there to “half steam,” a port worker told Reuters. The ports of Iquique, Antofagasta, Huasco, Caldera, San Antonio and around six smaller ports in the southern Bio Bio region are already on strike, a union leader said.
The port of Arica in the copper-producing North could also join the strike, Iquique port union leader Cesar Luna told Reuters. Around eight boats are waiting in front of the Northern port of Iquique and six are bidding time in Mejillones, Luna said, adding some ships had been re-routed to Peru.
Another trader in the Andean country said he didn’t know of any miners who have been forced to buy metal on the spot market to meet their contract obligations.
“Even if the issue is solved, this is going to generate huge congestion,” a trader said. “The ones in the most critical situation are the smaller miners.”
Miners BHP Billiton and Xstrata, who also operate in Chile’s mineral-rich North, were not immediately available for comment.
World No.3 copper mine Collahuasi said it had not been affected by the strike.
The strike comes as state copper miner Codelco is also facing a potential 24-hour work stoppage at all its divisions this month.
Experts say presidential elections in November have also contributed to an uptick in labor unrest.
A move by commodity trader Trafigura to ramp up rental revenues by drawing Europe’s spare copper into its warehouses in Antwerp has combined with a Chilean port strike to push Europe copper premiums near triple-digit levels, Reuters reported last month.
The supply-curtailing strike comes at a tough moment for copper prices, which fell to their lowest in more than seven months for a second session on Wednesday, on worries about global demand.
Fruit, Wood Pulp also Hit
In addition to mining metal, Chile is also a big producer of wood pulp, fruits, wine and salmon.
Fruit growers in most of Chile’s central-southern regions will temporarily halt harvesting as of Friday, as some 1,600 containers sit at the San Antonio port and producers’ losses already total some $50 million, fruit trade group Fedefruta said.
Those losses could climb to $400 million if the strike continues through April, the group added.
Meanwhile, three of forestry and paper company CMPC’s units have suspended exports, with 42,000 tons of wood pulp waiting to be put on ships, the company’s general secretary Gonzalo Garcia said.
“We calculate that the effects of this strike will be felt two months after operations have restarted because the traffic jam at ports will be huge and there will be a long line to load ships,” Garcia said. (Reu
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