COMMODITIES : Copper Skids on Rumors of Strike Accord

Prices of copper futures plummeted Thursday on reports that the Southern Peru Copper Co. had reached a labor agreement with its white-collar and clerical workers and was nearing settlement of a 3 1/2-week-old miners strike.

On other markets, precious metals prices also fell sharply, soybean futures plunged while grains finished lower, livestock, meat and energy futures were mixed and stock index futures advanced.

The spot copper price on New York’s Commodity Exchange fell 8.75 cents--the steepest one-day decline in the Comex spot copper contract since Feb. 1--to $1.4325 a pound, more than 10 cents below the record high of $1.538 established Nov. 2.

The most active contract, for delivery in December, tumbled 8.85 cents to $1.3675 a pound.

The selloff was prompted by a midday report that Southern Peru Copper, the biggest copper mining firm in the world’s sixth-largest copper producing country, had come to terms with striking clerical and white-collar employees, analysts said.

The company’s miners remained on strike, but company officials reportedly said they may reach an agreement with them by Monday. The workers have been on strike since Oct. 18.

Rally May Have Peaked

Earlier in the day, Southern Peru declared force majeure on shipments of 3,000 metric tons of copper to European customers, meaning that it would be unable to honor those commitments, and said shipments of an additional 4,000 metric tons would be delayed.

But the copper market failed to rally on that ostensibly bullish news.

The strike has been a major factor in the copper market’s surge to record highs. And while worldwide supplies are expected to remain tight well into next year, the market’s behavior may indicate that the dramatic rally has peaked, analysts said.

“Whether they’re moving close to a settlement or not, this raises a flag: Has the top been put in or not?” said Craig Sloane, a metals market analyst with Smith Barney, Harris Upham & Co. in New York.

“Today feels more like we’ve topped than any other day we’ve had,” he said. “This is how the market acts when it’s at the top.”

Prices of precious metals futures also fell sharply, partly on profit taking before the Veterans Day bank holiday today and partly in reaction to a rise in short-term interest rates, analysts said.

On the Comex, gold settled $4.10 to $4.50 lower, with December at $420.50 an ounce; silver was 13.7 cents to 14.6 cents lower, with December at $6.44 an ounce.

Soybean futures prices plunged on heavy selling near the close of trading on the Chicago Board of Trade, dragging down wheat and oat prices and spurring further declines in an already weak corn market.

Soybeans Lower

The collapse apparently was triggered by a massive sell order from the Iowa Grain Co., a large commodities brokerage firm that had purchased about 5 million bushels of soybeans early in the session and sold them all back shortly before the close, analysts said.

In livestock and meat futures trading on the Chicago Mercantile Exchange, live cattle settled 0.18 cent lower to 0.03 cent higher, with December at 72.87 cents a pound; feeder cattle were 0.10 cent lower to 0.23 cent higher, with November at 81.10 cents a pound; live hogs were 0.70 cent lower to 0.55 cent higher, with December at 40.72 cents a pound, and frozen pork bellies were 0.18 to 0.53 cent lower, with February at 44.12 cents a pound.

In energy futures trading on the New York Mercantile Exchange, West Texas Intermediate crude oil settled 2 to 12 cents higher, with December at $13.98 a barrel.