LONDON: Copper and nickel slipped on Wednesday as the dollar surged to a four-month high, with copper investors also growing cautious about signs of rising supply. Zinc hit another 14-month high on falling mine output.
The dollar rose versus a currency basket, bolstered by strong U.S. housing data and growing expectations that the Federal Reserve may raise rates before the end of the year.
A stronger dollar dampens the buying power of commodity investors paying with other currencies. That weighed on all metals including nickel, which slipped despite news that the Philippines has asked Nickel Asia Corp, its top producer, to stop exporting ore from Manicani island.
Nickel has surged some 10 percent this month on plans for a mining crackdown in the Philippines, the top supplier of nickel ore to China. Expectations that the biggest mines will escape the crackdown have capped the metal's gains, however.
Caroline Bain, senior commodities economist at Capital Economics, said the Nickel Asia development, if verified, "sounds a more medium term positive for the nickel price".
London Metal Exchange nickel fell 0.9 percent to $10,480 a tonne in official trading, having hit its highest since October at $10,670 last week. Copper fell 1.4 percent to $4,915.50 a tonne in official rings.
China's copper output was steady on the year in June, though it rose 7.6 percent to 4.03 million tonnes in the first half of 2016.
Also, BHP Billiton said it expects a 5 percent rise in its copper output in the current fiscal year to end-June 2017.
Barclays said there were few reasons to be optimistic about copper, the worst performing commodity so far this year.
"This is largely due to strong supply growth in 2016-17 as the last of the big growth projects reach fruition combined with anaemic demand," it said.
Zinc hit a 14-month high of $2,254 a tonne, before going into negative territory. It failed to trade in official rings and was bid down 0.4 percent at $2,232 a tonne.
The galvanising metal has been investors' favourite this year, surging 39 percent so far as closures and suspensions of major mines has tightened concentrates supply.
Tin hit its lowest in nearly two weeks at $17,610 a tonne, before paring losses to trade down 0.3 percent at $17,655 a tonne in official rings.
Top tin exporter Indonesia shipped 7,651.84 tonnes of refined tin in June, data showed, up 42 percent from a month ago and down 8 percent from the same month last year.
Aluminium was bid 1.4 percent lower at $1,624 a tonne after touching $1,615, the lowest in more than three weeks, while lead was bid down 1.6 percent at $1,832 a tonne.
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