July 18 (Bloomberg) -- Copper prices rose to a four-week high in New York on speculation an extended strike at Asarco Inc. will accelerate a decline in inventories.

London Metal Exchange-monitored stockpiles have dropped 45 percent this year to a 31-year low as global production from mines and scrap yards fell short of demand. Grupo Mexico SA said on July 4 that the strikes at its Asarco unit's mines in Arizona and plants in the state and in Texas may reduce output by 50 percent.

The strike, heading into its third week, ``could just drive the price higher, given there's so little inventory,'' said James Holme, president of H&H Metals Corp., a New York-based trading company. Traders who sold contracts expecting prices to decline are ``skittish,'' he said.

Copper futures for September delivery rose 0.45 cent, or 0.3 percent, to $1.5665 a pound on the Comex division of the New York Mercantile Exchange, the highest closing price since June 17 when futures climbed to a 16-year high of $1.61. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.

Asarco, which produced about 40,000 tons (about 89.6 million pounds) of copper in the first quarter, invoked a ``force majeure'' clause last week, declaring its inability to make contracted deliveries to customers because of the strike.

The company's Amarillo, Texas, refinery, which supplies copper wiring for utilities and buildings, ran out of copper rods last week, a spokesman said.

July 22 Meeting

Asarco and the United Steelworkers have agreed tentatively to meet on July 22 for the first talks since the strike started, union head Terry Bonds said in a telephone interview from Albuquerque, New Mexico.

``We would certainly consider almost anything that was positive rather negative, and we haven't gotten anywhere close to that,'' Bonds said.

The strike started because Asarco violated fair-labor practices by refusing to negotiate in good faith, Bonds said. Asarco didn't return a call for comment.

Pete Cinquemani, commissioner of the Federal Mediation & Conciliation Service, a U.S. government agency, was invited to the July 22 meeting, tentatively set for Phoenix, Bonds said.

Stockpiles in warehouses approved by the Comex are down to 13,911 short tons, with 2,326 tons due to come out of a Tucson, Arizona, warehouse. About 1,500 Asarco workers are on strike covering the Mission, Silver Bell and Ray mines and Hayden smelter in Arizona and the rod mill in Amarillo.

Stockpiles monitored by the London exchange dropped 675 metric tons, or 2.4 percent, to 27,000 tons, the lowest since July 1974.

Copper for delivery in three months on the LME was little changed at $3,363 a ton ($1.5252 a pound). Prices on the Shanghai Futures Exchange gained 0.2 percent.

To contact the reporter on this story: Claudia Carpenter in New York at ccarpenter2@bloomberg.net.

Last Updated: July 18, 2005 14:10 EDT