Up-up and away! This has been the story on copper prices this first half. Prices have jumped 28%, reaching record-breaking levels in May. This past week, they are within $210 USD from their all time high.

Price increases are being fueled by high crude, a weak US dollar, and a growing amount of investors allocating their fund money to commodities. Further exasperating this growth is an unstable supply caused by labour disruptions in primary producing regions.

As the price of a commodity rises, workers see the mine owners having a windfall in profits and they want in on the gains. This past Monday, the largest federation of mining unions in Peru (the world’s second largest supplier) commenced strike operations. In addition to copper, this nation-wide strike affects silver and zinc. Strikers have marched to Congress, and have met with legislators- to see that a higher stake in the profits from mining are distributed among workers and the poor and not just into the pockets of upper management and mine stakeholders.

Peruvian strikers have come to action at a time where the political climate of Peru may help them in achieving their desires. Alan Garcia, the president of Peru, faces the challenge of getting congress to agree to sign a bill in support of the mine workers requests. So far, Garcia has been unsuccessful. If Garcia does not garner the backing of Congress, he risks losing support for his free market policies, at a time when left-winged parties have their eye on the prize of winning the 2011 election.

These strikes have been widespread in Latin America since the commodity boom. For Peru this is the third national strike in less than 14 months. A one hour walk out in Mexico this week marked the third union protest in the region this year. In Chile, the world’s largest copper producer, protests since 2006 have been contributing to copper’s price ascent. CODELCO, the nations largest mine has been subject to labour unrest as current as this past May.

Protests are not limited to mine workers. Villagers and other residents often resort to violence in order to stake a claim in Copper taxes that they see making their governments wealthy. Last month villagers in Peru held dozens of police hostage in a church until the government agreed to give their mining province a bigger take of copper taxes. In Chile, a year ago, a group derailed a train carrying copper concentrate.

Nearly a dozen mines have joined the current strike, with the big players in copper being: Southern Copper’s (NYSE.PCU) Ilo smelter and Cuajone mine, Xstrata (XSRAF.PK), and BHP Bilton’s (NYSE.BBL) Altamira zinc and copper mine. Many other mine and smelter workers are still debating joining force.

Despite coppers long standing increase (prices have risen for over 15 years tripling in the past five years) many analysts say that the prices are unjustified, over inflated by strikes in a time where global demand is waning.

Analysts can’t see eye to eye on Copper’s future. On the other side of the scale there are those who say that this increase is likely to be sustained in the fact that the global recession is not going to have enough of an impact, and the emerging economies will always show an increase in their need for copper. If they even agree that a global slow down will occur, they say it is just a blip in a longstanding trend of global growth. Copper is a shrinking resource, and its demand will continue. Supply threats are likely to continue. Mid-week copper reversed back slightly, and the naysayer’s on coppers upward swing claimed victory, saying that the strikes would have little affect. However, they did speak to soon for as the week went by the ascent continued under strengthening strike force.

China, who uses 20% of the global copper supply has softened its’ demand. Some analysts claim that this is the start of a global recession, fuelled by the tumultuous financial near past of the USA. Other analysts scoff at China’s current decrease in demand. They say that either China is choosing not to report some of its’ copper purchases, or that they are testing the waters, seeing if holding off on a large purchase for copper is possible until prices settle.

Interesting to note, this past week the Chinese government announced that they were debating resuming their copper processing trade. In 2006, China banned copper concentrate processing trade (also known as copper tolling), which consists of importing and processing copper concentrate and then exporting refined copper at preferential tax rates. Cancellation of this policy aimed to control capacity expansion for energy-intensive and low value-added metal products, as well as curb environmental pollution.

With the drastic increase in the price of copper, The Chinese government is obviously eyeing getting back into the game. If they really thought the global demand was going to shrink would they even consider going through all the red tape to change legislation?

Copper is currently being driven by more than just supply and demand. As mentioned earlier, the bullish commodity market, the weak greenback, and the high cost of crude are having their influence. Another interesting contributor is the investors who were persuaded to sell copper funds in the beginning of the year as analysts “fact-checked” the copper market as mentioned above, are buying back in to copper stock at a high rate as the element continues to gain momentum into the second half. This repurchase of copper stock adds extra momentum to coppers ascent.