By Jim Williams

Copper prices steadied in early morning trading after opening the week on a negative note. Yesterday the red metal plummeted 1.5 percent after Syrian allies including Russia, Iran and some militias supporting Syria criticized last week's attack on a Syrian military airbase and warned they would respond to any new aggression with force.

Market watchdog Angel Commodities predicts copper prices will trade sideways today as risk appetite is likely to be under pressure following this development, in addition to news of a probable U.S. navy strike on North Korea owing to the latter's advancing weapons program.

The Usual Copper Fluctuation
Concerns about oversupply continue to persist as the world's top two copper mines look to recover from disruptions.

Prices have bounced around a bit since production resumed from BHP Billiton's Escondida mine in Chile and Freeport McMoRan Inc said it was awaiting final details on a temporary export permit in Indonesia which would end lengthy disruptions there.

The Escondida strike lasted more than a month and ended only after striking miners agreed to go back to work without a new deal, but with an eye on Chilean laws that appear to give them an advantage in future negotiations. The loophole in the law says both sides need to start contract talks based off the current agreement. The new law means that regardless of the economics of the copper mining business, the workers will not do worse than their current contract.

"When it comes to the settlement of a strike at a major commodity producing mine, a more significant downside correction would typically take place," says tED contributor Andrew Hecht, of Seeking Alpha. "However, in the case where the union has gained the upper hand over BHP, the price has been unusually firm. I expect that copper will continue to hold above the $2.50 level over coming months. Global economic conditions have improved, the likelihood of U.S. infrastructure building is high, and the labor issues have not played out and may just be beginning. Copper is likely to be the beneficiary of a continuation of BHP's woes at Escondida and the price could be sitting at a level from which it continues to work its way to $3 in the months ahead."

China Connection
As usual, all eyes will be focused on China, but this time for a slightly different reason. This go around the focus will be on how well China and the U.S. can work together after the leaders of the two largest global economies met last week – the first time since President Donald Trump took office.

The emphasis of the relationship will be to see how involved China will be in bringing President Trump's campaign promises to fruition – in the form of a $1 trillion infrastructure initiative and a security wall along the U.S.-Mexican border.

The question is, will China be one of the key suppliers of the products – including copper – needed when/if these projects happen? Andrew Hecht has some answers regarding the relationship here.

We will keep an eye on the situation in Syria, as well as the markets in general, and report anything we find as it pertains to the price of copper.