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Copper prices rise amid BHP labor dispute

Posted: 25 Aug 2006 ?? ?Print Version ?Bookmark and Share

Keywords:BHP Billiton? copper? electronics? Mark LaPedus?

The ongoing labor strike at BHP Billiton Ltd's copper mine in Chile has made the electronics industry start worrying about copper supply and pricing.

Union workers at the world's largest copper mine extended a strike for the 16th consecutive day on Tuesday (August 22) after rejecting the company's latest offer to settle the dispute, according to a report from Bloomberg.

Copper prices have soared since BHP shuttered the world's biggest copper mine over two weeks ago. The world's biggest mining concern also ended negotiations with union workers, who have been blocking roads to the Escondida site, according to the report. The mine in Chile supplies 8.5 percent of the world's copper.

For some time, there has been a major concern for the soaring prices of copper, which is used for chip interconnects, lead frames and a multitude of other applications in the electronics industry.

The soaring price of copper and other raw materials over the last few months has forced network communications and coax cable maker Andrew Corp. to recently add a steep surcharge across many of its products.

Prices for copper have doubled in the past year, due in part to huge demand in China. Copper for October delivery on the Shanghai Futures Exchange jumped 2.3 percent to $8,565 a metric ton in China, according to the Bloomberg report.

Soaring copper prices could hurt potential strategies at various companies. For example, Kulicke & Soffa Industries Inc., a maker of wirebonding equipment, is working with customers to evaluate copper wire bonding and to compare the results to wire bonding with gold, the traditional material, the company revealed in its third fiscal quarter financial results.

With gold costing more than $600 per ounce, and having followed an exponential curve to double in price in the last four years, it is no surprise that packaging companies are considering lower cost alternatives. Now, it's unclear if K&S will move forward with copper.

- Mark LaPedus
EE Times

Jennifer Baljko contributed to this article

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