By Jim Williams

After hitting a 20-month high on Monday the price of copper takes a couple of shots to the heart.

Copper prices pulled back in early trading today, ahead of renewed talks between striking workers and management at the world's largest copper mine.

Union workers at Chile's Escondida mine said they would begin talking with management today. The mine is majority-owned by BHP Billiton Ltd. The union went on strike last Thursday over what they said were plans to cut worker benefits after government mediation between the two parties broke down.


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"A quick resolution would most likely put some pressure on copper prices, with the market expecting a lengthy strike," ING said in a morning commodities note.

"I would put the odds at no better or worse than 50/50," one analyst predicts.

Prices were still supported by another disruption in copper supply at Freeport-McMoRan's Grasberg mine in Indonesia, the world's second-largest copper mine, Reuters reported.

Today's news comes a day after copper took a hit thanks to a stronger dollar after Federal Reserve Chairwoman Janet Yellen raised expectations for a rate increase next month. "Waiting too long for accommodation would be unwise," she said when pressed on rate hike timing. The Chair testifies again today, this time before the House Financial Services Committee.

"The Fed's statement that inflation "will" reach the 2% level is likely an understatement," says tED contributor Andrew Hecht. "The Fed remains behind the curve when it comes to fighting inflation and we are likely to see many commodity markets continue to move higher as companies are seeing a pickup of economic activity. On a long term basis, copper is looking technically bullish. In fact, copper has not looked this good on the monthly chart since 2009 when it was on its way to all-time highs."

Copper has a lot going for it these days. Infrastructure rebuilding in the U.S., the potential for a rebound in the Chinese economy, the output disruptions mentioned above and declining stockpiles support the technical trend of the base metal.

"Copper has been shining over recent months," adds Hecht. "However, it is likely that the red metal will run out of some upside steam as it approaches the $2.90-$3.00 level. My sense is that copper will now make higher lows and higher highs as the market has broken the back of the bear that gripped the industrial metal for almost five years."

Copper is up 4% so far this week after the red metal rallied to the highest level since May 2015 at over $2.82 on Monday. Last February, the 11th to be exact, the price was trading just around the $2 per pound level. In other words, the red metal has rallied 41% in the last year!

Want More Copper News? Click here to read one take on why copper prices have surged.