Copper eases as Fed taper talk boosts dollar

LONDON: Copper prices fell to a one-week low on Thursday as concerns about the timing and pace of the US Federal Reserve's monetary easing plan kept the dollar near one-year highs.

Benchmark copper on the London Metal Exchange (LME) shed 1.4% to $9,020 a tonne in official trading.

The metal, widely viewed as a gauge of the health of the global economy, was heading for its first quarterly drop in six.

Talk of policy tightening in the United States has boosted the dollar, making greenback-priced metals more expensive for holders of other currencies.

"The dollar is up on some safe-haven buying with all the macro concerns around and the Fed tapering, which could be announced at the next meeting," said independent commodities analyst Robin Bhar.

"There are a lot of worries out there about economic growth, supply chains and power rationing in China."

Copper drifts lower as focus turns to US Fed meeting

Inventories: Falling inventories have underpinned copper prices and helped to contain losses.

Stocks in warehouses monitored by the Shanghai Futures Exchange fell to their lowest since May 2009, down 2.5% to 43,525 tonnes from last Friday.

In warehouses registered with the LME, on-warrant stocks were at their lowest since June at 124,200 tonnes.

Premium: The premium for cash LME copper over the three-month contract climbed to its highest since Aug. 23 at $19 a tonne, indicating near-term shortages of material in the LME system.

Power: Metal consumers in China, from appliance makers to auto, construction and solar panel companies, are readying themselves to face potential supply shocks after power curbs and shortages forced several smelters to cut production in recent weeks.

China Data: Factory activity in top metals consumer China shrank unexpectedly in September as high raw material prices and power cuts pressured manufacturers in the world's second-largest economy.

Peru: Miner MMG said it had resumed transportation of shipments after roadblocks in the Chumbivilcas province in Peru, which had disrupted operations in recent weeks, were temporarily removed.

Chile: Copper output in top producer Chile fell 4.6% year on year to 466,928 tonnes in August, the government's statistics agency said.

Other Metals: LME aluminium was down 1.6% at $2,866 a tonne, zinc shed 1% to $3,025, lead lost 2.5% to $2,087, tin was up 0.6% at $35,250 and nickel was down 1.3% at $18,100.