LONDON: Copper prices pulled back on Friday on a stronger dollar and as investors locked in profits from a recent rally ahead of the weekend.
Three-month copper on the London Metal Exchange (LME) dropped 1.1% to $8,855.50 per metric ton by 1715 GMT. It had rallied about 13% from early February, touching an 11-month peak of $9,025.50 on Monday. US Comex copper futures dropped 1.2% to $4.01 a lb. “It’s been a very strong month and pull-backs are inevitable, especially on days when the dollar is stronger,” said Nitesh Shah, commodity strategist at WisdomTree.
The dollar index gained after a week of central bank announcements, making commodities priced in the US currency more expensive for buyers using other currencies. Shah said after short-term weakness and consolidation, copper was likely to see further gains, especially once central banks actually started cutting interest rates. “I think the fundamentals remain firm, especially after the smelter cutbacks in China start to have an impact on metal availability,” he said. “I expect prices to rise back above $9,000 and probably hit the $10,000 threshold in a few months as well.” The latest jump in prices was fuelled by news last week that major Chinese copper smelters reached an agreement to lower operation rates at some loss-making plants.
On Friday, however, state-backed research house Antaike said China’s annual refined copper output will grow more than 3% this year despite the smelter agreement as overall smelter capacity has been expending.
Among other metals, LME aluminium rose 0.2% to $2,307 a ton, nickel dropped 2.2% to $17,150, zinc eased 1.6% to $2,485, tin lost 0.6% to $27,705 and lead slipped 0.6% to $2,039. On a weekly basis, nickel and lead are the worst performers across base metals on the LME, with nickel down nearly 5% and lead off 4% so far.
Comments
Comments are closed for this article.