LONDON: Copper prices rebounded after touching a three-week low on Friday as the US dollar dropped from its three-week peak after weak US services sector data and made dollar-priced metals more attractive for holders of other currencies.
Three-month copper on the London Metal Exchange (LME) was flat to $8,464.5 a metric ton by 1645 GMT after hitting its lowest since Dec. 13 at $8,416. The metal is down 1% so far this week.
Data showed earlier on Friday that US employers hired more workers than expected in December, suggesting that the Federal Reserve would probably be in no rush to cut interest rates over the next few months. However, after the release of the services sector data traders raised bets on easing at the Fed March meeting to around 76%, from about 68% to 70% over the last week.
“If US rates stay higher for longer, this would lead to a stronger dollar and weaker investor sentiment, which in turn would translate to weaker metals prices,” said Ewa Manthey at ING. Signs of tightening supply and thin stocks in top consumer China are also supporting copper.
Russian miner Udokan Copper is assessing damage after a fire at its plant, which was expected to start copper cathode production in 2024. A delay would add to the growing list of supply disruptions in the industry.
With declining growth from mine output, the global refined copper market faces a growing deficit over 2025 to 2027, CITIC Securities said. On the technical front, copper is facing resistance at the 21-day moving average of $8,487.
LME nickel rose 1.7% to $16,330 a ton after hitting its lowest since Nov. 27 at $15,895. The metal lost 45% in 2023 amid rising output in Indonesia.
“A persistent surplus in the nickel market suggests that prices are likely to remain largely under pressure through 2024,” ING’s Manthey said.
In other metals, aluminium lost 0.2% to $2,275.5 a ton, zinc rose 0.7% to $2,556.5, tin was down 0.7% at $24,665 and lead jumped by 1.8% to $2,079.
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