(Updates prices, adds WoodMac comment on aluminium)
LONDON, Oct 14 (Reuters) - Copper gained on Wednesday as investors gauged potential threats to supply from Chile while pricing in more U.S. stimulus spending after the election and steady demand from China.
Three-month copper on the London Metal Exchange (LME) added 0.3% to $6,712 a tonne by 1610 GMT after easing by 0.7% on Tuesday and rebounding about 50% since mid-March.
“I think the market is in a wait-and-see mode, digesting the U.S. election, which will be positive for base metals because both the Republicans and Democrats are for more spending in one way or another,” said Gianclaudio Torlizzi, a partner at consultancy T-Commodity in Milan.
“The second wave of the virus will force central banks to continue to inject huge amounts of liquidity in the markets and we’ve seen a drawdown of copper out of China, so consumption of metal in China is still good.”
Copper was also supported by the threat of possible strikes in top producer Chile.
Supervisors at Chile’s Escondida mine and mine operator BHP will extend negotiations to stave off a strike at the world’s largest copper deposit.
That is one of six mines in Chile due to hold labour talks in the coming months. The mines account for combined annual production of 2.7 million tonnes.
* Copper prices pared gains after data on Wednesday showed LME copper inventories MCUSTX-TOTAL continued to climb, rising by 16,725 tonnes to 169,925, their highest since July 10. They have jumped 131% since Sept. 25.
* LME aluminium prices, which hit their highest in nearly three months on Tuesday, have been kept buoyant by financing deals despite metal surpluses, Julian Kettle, vice chairman of metals and mining at consultant Wood Mackenzie, told a webinar.
Kettle said that a build-up of 7 million tonnes in inventories is due over two to three years.
“We’re seeing a huge increase in stock finance, which is removing it from the market,” he said. “You end up with prices being supported and you don’t get the necessary correction.”
* LME aluminium fell 0.4% to $1,851 a tonne, zinc rose 0.3% to $2,424.50, lead declined 0.9% to $1,786, nickel advanced 2.1% to $15,360 and tin was up 0.3% at $18,300.
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$1 = 6.7396 yuan Editing by Jan Harvey and David Goodman
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