Copper prices had recently been on the rebound as hopes for a “soft landing” in the global economy gained traction, buoyed by favorable inflation and labor data. Additionally, concerns over potential supply disruptions had provided a temporary boost to the market. However, this morning, one of the key drivers of the recent price rally was dampened.

Earlier this week, BHP, the Australian multinational mining and metals giant, faced a strike at its Escondida copper mine in Chile—the world’s largest copper mine. The strike sparked fears of significant disruptions to copper ore supplies, exacerbating an already tight physical market. However, BHP announced this morning that it has reached an agreement with the union, resolving the strike. The agreement, which addresses issues of compensation and labor equity, is expected to lead to the resumption of normal operations in the coming days, easing concerns about immediate supply shortages.

Globally, there has been an uptick in labor disputes in commodity-rich countries. Recently, an oilseed workers’ strike in Argentina disrupted soybean crush operations and shipping logistics, while earlier this year, a strike at First Quantum’s copper mine in Panama raised concerns about supply chain disruptions. These trends are critical for traders to monitor, as labor disputes in key commodity-producing regions appear to be on the rise.

From a fundamental perspective, London Metal Exchange (LME) copper warehouse inventories have been increasing, while demand for the industrial metal in China remains sluggish. Although there are signs of depleting inventories in Shanghai, the broader macroeconomic data does not yet support a significant rebound in industrial demand. As a result, any short-term gains in copper prices may prove to be temporary until there is clearer evidence of a sustained recovery in industrial demand. Until then, labor disputes may be the only near-term catalyst for industrial metal bulls.

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