BHP BHP Group Limited

By Katherine Dunn and Ryan Dube 

Copper prices fell on Friday, as the end of a strike at the world's largest copper mine eased supply worries.

Copper for May delivery settled down 0.5% at $2.6310 a pound on the Comex division of the New York Mercantile Exchange.

On Thursday, workers at the Escondida copper mine in northern Chile said they would end a strike at the mine, which is majority-owned by BHP Billiton Ltd.

The leader of the mine's largest union, Union No. 1, said workers would return to work on Saturday. The workers had agreed to implement an article that will allow them to return to work with their current collective agreement for 18 months.

On Friday, the agreement to end the strike, which began Feb. 9, was pushing prices down, but the size of the decline was muted, noted Nitesh Shah, a commodities strategist at ETF Securities in London, as the agreement hasn't resolved the underlying issues behind the strike.

"It is sort of kicking the can down the road a bit," said Mr. Shah.

The mine produces about 5% of the world's copper, and the six-week strike took out about 1% of the world's annual copper production, he estimated.

Other supply disruptions, at Freeport-McMoRan Inc.'s Grasberg copper mine in Indonesia, which is stalled over an export dispute with the government, and a strike at the Cerro Verde copper mine in Peru, are continuing.

The decline in copper's price was likely muted by a lingering expectation of better demand prospects for industrial metals on the back of President Donald Trump's campaign promises to fuel infrastructure spending and overhaul tax reform, Commerzbank said in a note.

"This could turn out to be a mistake, however, especially if U.S. President Trump loses the U.S. House of Representatives health care reform vote that was postponed until today -- as this would also jeopardize the planned tax reform," the German bank said.

Restrictions in Chinese cities on new real-estate buying could also damp demand from China, the world's top consumer of copper, the bank said. Chinese appetite for the metal far outstrips U.S. demand, which is around 8%, and so any change in demand from China is likely to have a far bigger effect on the supply balance than Mr. Trump's policies, analysts have said.

Gold for April delivery edged higher, closing up 0.1% at $1,248.50 a troy ounce ahead of the vote in the U.S. House of Representatives on a health-care bill, which is being viewed by some investors as a test of the Trump administration's ability to enact its agenda.

The vote is scheduled for 3:30 p.m. EDT on Friday, but concerns have been raised that the bill doesn't have sufficient support to pass. Gold prices traded as low as $1,243.30 a troy ounce on Friday before reversing losses.

"If it gets passed, the market will see it as one hurdle out of the way for finally moving on to tax reform and other fiscal stimulus measures," said Paul Wong, senior portfolio manager at Sprott Asset Management. "If the Health-care Bill does not get passed then the opposite is likely and gold should rise."

--Stephanie Yang contributed to this article.

Write to Katherine Dunn at Katherine.Dunn@wsj.com and Ryan Dube at ryan.dube@dowjones.com

(END) Dow Jones Newswires

March 24, 2017 14:40 ET (18:40 GMT)

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