LONDON: Copper prices slipped on Tuesday on a stronger dollar and concern about the impact of power cuts in top metals consumer China, where the economy has already been weakening.
Three-month copper on the London Metal Exchange was down 1.1% at $9,260 by 1605 GMT, after rising 0.3% on Monday. Copper has eased from a record peak of $10,747.50 touched in May, but it is still up 20% so far this year.
“We have the risk of a sudden spike in the dollar, which will weigh on the market,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
“And we have a worsening situation in China due to a double shock – the credit crunch from Evergrande and a shock coming from the energy crisis. It’s a very tricky market to trade so I think a lot of people will stay on the sidelines.”
In China, a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage.
The US dollar rose to its highest in more than five weeks due to rising bond yields, making metals priced in dollars more expensive for buyers using other currencies.
The global zinc market deficit narrowed to 6,600 tonnes in July from a revised deficit of 40,000 tonnes in June, while a surplus in the global lead market fell to 11,700 tonnes from 13,400 tonnes during the same period, data showed.
LME nickel was the biggest loser, sliding 2.1% to $18,545 a tonne after shedding more than 2% on Monday. “The power curtailment policy affects part of the downstream consumption of nickel,” brokerage Huatai Futures said in a note.
LME tin bounced by 1.9% to $35,780 a tonne, having tumbled more than 4% on Monday after power usage curbs in China also cut demand for refined tin. LME aluminium gained 1.7% to $2,931.50, zinc added 0.2% to $3,072.50, while lead rose 0.3% to $2,168.50.