LONDON: Copper edged lower on Thursday and nickel was set for its first fall in 10 sessions as a slightly stronger dollar and a slowdown in Chinese services sector growth triggered profit-taking.
But copper, which hit a two-year high on Monday, remained well supported by strong Chinese manufacturing data earlier this week and tight supplies, said ETF Securities analyst Nitesh Shah.
"There's a minor pullback from the past few weeks (but) the fundamentals remain quite strong. We've seen no real weakness in economic data."
COPPER: Benchmark copper on the London Metal Exchange traded down 0.5 percent at $6,318 a tonne in official rings, still close to Monday's two-year high of $6,430 and up 14 percent since early June.
CHINA: Growth in China's services sector slowed in July, a survey showed on Thursday, but data earlier showed manufacturing grew strongly.
CHINA SCRAP: Proposed Chinese restrictions on scrap imports may have a limited impact on the refined copper market, Barclays analysts said: "Net consumption and scrap production rates are likely to remain the same, with only the supply chain and country of refining changing."
GRASBERG: An international trade union will press Indonesia to reinstate thousands of striking workers at Grasberg, the world's second-largest copper mine.
COPPER STOCKS: Prices were supported by a fall in on-warrant stocks at LME-registered warehouses to 189,900 tonnes from more than 230,000 in mid-July after 8,700 tonnes of cancellations.
NICKEL: LME nickel did not trade but was bid down 0.6 percent at $10,290 a tonne, on track for its first decline since July 20 after touching a four-month high of $10,445 earlier in the session.
FUNDAMENTALS: Expectations of stronger demand from Chinese stainless steel mills and concerns over supplies from top nickel ore exporter the Philippines have boosted the metal.
SUPPLY: But ore exports from Indonesia are increasing, with licences for exports totalling 8.1 million tonnes granted since a ban was relaxed in January, analysts at Commerzbank said.
DOLLAR: The US dollar rose but remained near 15-month lows. Dollar weakness has fuelled demand for dollar-denominated metals because it makes them cheaper for holders of other currencies. FRX/
SPECULATORS: "Much of the recent strength across industrial metals has been financially driven (whether dollar related/money inflows)," brokers Marex Spectron said in a note, warning that physical metal demand may not justify gains and increased financial interest could cause price volatility.
PRICES: Aluminium traded down 0.6 percent at $1,915, zinc did not trade but was bid 0.4 percent higher at $2,813 and lead was bid up 0.4 percent at $2,363. Tin traded up 0.1 percent at $20,605 a tonne.
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