The base metals were mixed on Monday. Copper was down in the pre-dawn hours, rose from there to mid-morning, but then sagged again to finish little changed at $3.8418/lb., up three-quarters of a cent. Nickel plunged in the pre-dawn hours, then tried to rally but eventually gave up all of its gains, to close just off its intraday low at $9.3417/lb., down 31 cents.

Zinc fell in the pre-dawn hours, then traded sideways, ending at $0.9005/lb., down more than three-quarters of a cent. Aluminum rallied off its pre-dawn lows, and managed to hold most of its gains at $1.4807/lb., up a half-cent, while lead had a strong morning rally, adding a penny and a quarter, to $0.8943/lb.

Copper held up as the threat of another Peruvian strike caused concerns about supply problems going forward.

Freeport-McMoRan’s Peruvian copper-mine workers at the Cerro Verde pit failed to reach an agreement over issues including better working conditions and are planning to walk out on Wednesday, a union official said.

“The thing that copper has to guard against is a potential supply shortage,” said Ron Goodis, of Equidex Brokerage Group in Closter, New Jersey. “Supplies are tight, and there’s no room for disruptions.”

Goodis added that, “There’s still a lot of copper demand out there … And with the tight supply situation, it provides the path for copper to keep going higher.”

The word on copper out of China was mixed. The country’s apparent consumption of copper increased 2.4% in the first five months of this year, a steep drop from the 28.66% growth in the same period of last year. And industry analysts have adjusted the forecast of China’s demand for copper from the former two-digit growth to single-digit.

China’s output was nearly 1.5 million tons of copper, January-May, a 19.1% increase that exceeded the 11.5% growth in the same period last year. But copper imports were only 486,400 tons, a 26.34% drop, year over year.

Overall, analysts expect China’s output of refined copper to be more than 3.8 million tons for the whole of this year. That would be an increase of about 10% over 2007.

Source: Peruvian Strike Supports Copper, China’s Demand is Slowing, but Output Expected to be Up for the Year