http://www.kitco.com/reports/KitcoNewsMarketNuggets20101110.html

Market Nuggets: Goldman: Collahuasi Strike Reinforces 12-Month $11,000 Copper Target

12 November 2010, 10:40 a.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/

(Kitco News) -- Goldman Sachs says the strike at the Collahuasi mine in Chile reinforces its view for near-term upside in copper and also reinforces the bank’s 12-month target of $11,000 per metric ton. Base metals have generally moved higher over the last week since the FOMC’s announcement of renewed quantitative easing, but copper has outperformed as it hit a record high just shy of $9,000 Thursday. “Fundamentally, we believe that the ongoing copper strike is a significant development, potentially exacerbating already large deficits in the global copper market,” Goldman says in a weekly report. “Further, we believe that concerns about Chinese demand are likely overdone; as softness in the physical markets is mostly seasonal and the impact on metal demand of probable Chinese monetary tightening is likely to be limited.” Collahuasi is the world’s third-largest copper mine, representing 3.2% of the global mined supply, Goldman says. “While there has not been any public disclosure regarding specific production and shipment disruptions, by our calculations, we believe it would be difficult for the strike to progress into next week without the company having to limit customer shipments, likely another short-term catalyst for the copper price to move higher.”

By Allen Sykora of Kitco News; asykora@kitco.com