Saturday, 28 March 2015 01:22
LONDON: Copper tracked losses in oil and fell to its lowest level of the week on Friday as traders waited for comments from the Federal Reserve, but the metal still clocked up its third straight weekly gain helped by mine closures in key producer Chile.
Oil fell as fears about the disruption of Middle East crude shipments from Yemen’s conflict eased, deterring investments in commodity basket funds that include metals like copper.
The rally in the dollar sputtered on Friday as bullish bets lost some steam ahead of comments from Federal Reserve Chair Janet Yellen.
Analysts said the long-term uptrend in the dollar remained in place, however.
A strong dollar makes dollar-priced metals costlier for European and other non-US investors.
“We’re just seeing some profit-taking. I think it’s a blip on the (near-term) road higher,” said William Adams, head of research at Fast Markets. “Fundamentals are slightly better now with the various supply disruptions, but there’s no reason to get too bullish medium-term. China is struggling with lower growth,” he said.
Benchmark three-month copper on the London Metal Exchange ended down 1.9 percent at $ 6,005 a tonne, having earlier hit a one week low of $ 6,046.50.
Copper hit its highest level since Jan. 2 on Thursday at $ 6,294.50, and posted gains for the week of 0.4 percent – its first three-week winning streak since mid-2014.
Chile’s Codelco, the world’s No. 1 copper producer, said it was gradually reopening mines in the north of the country that were closed on Wednesday due to heavy rains, but that its Salvador mine remained shuttered.
In other metals, tin ended up 0.3 percent at $ 17,205 a tonne, while nickel ended down 2.9 percent at $ 13,285 a tonne – its lowest since November 2013 at $ 13,275, weighed down by LME stocks which remain near record high levels.
The Shanghai Futures Exchange launched its nickel and tin contracts on Friday. A trader said ShFE tin was well below LME prices, cutting the attraction of imports. However, nickel prices were much more closely aligned, suggesting imports may be profitable.
A positive arbitrage, or price differential, would encourage imports of nickel and may help put a floor under LME prices.
Elsewhere, lead closed down 1.5 percent at $ 1,825 a tonne but finished the month up 5.4 percent, after nearly 100,000 tonnes of LME stocks were booked to be shipped out this week, cutting off available supply.
China’s imports of lead concentrates surged by 44 percent in February.
Zinc ended down 0.4 percent at $ 2,082 a tonne while aluminium closed down 0.3 percent at $ 1,782.
Copyright Reuters, 2015
