Copper falls after US strikes on Syria, China steel sell-off

LONDON: Copper fell on Friday after a US air strike on Syria prompted investors to move out of riskier assets and the biggest sell-off in Chinese steel futures in two months spilled over into industrial metals.

Base metals were on the defensive following falls in the previous session, said Alastair Munro at Marex Spectron.

"If we're going to see an unwind of risk you'll see metals come under pressure," he said.

LME COPPER: Three-month copper on the London Metal Exchange was down 0.8 percent at $5,811.50 a tonne at 1117 GMT, adding to losses on Thursday and putting it on course for a 0.4 percent weekly loss.

COPPER TECHNICALS: Copper briefly dipped below key technical support at its 100-day moving average of $5,797 earlier in the session.

COPPER SPREAD: The discount of LME cash copper to the three-month contract closed at $31.25 a tonne on Thursday, close to the biggest in four years, indicating adequate supply of refined metal in the market.

CHINA STEEL: Base metals came under pressure after the most-active rebar on the Shanghai Futures Exchange closed down 4.9 percent at 3,038 yuan ($440) a tonne, its sharpest fall since Feb. 3, on concerns of rising steel supply and tepid demand.

LME ZINC: Zinc was down 1.2 percent at $2,695 a tonne. The metal used for galvanising steel had broken a long-term up-trend line from its January 2016 low, said Marex Spectron's Munro. He said technical support for the metal was at $2,640-2,650.

ZINC SPREAD: The discount of LME cash zinc to the three-month contract shrank to $23.80 a tonne from $27.75 earlier in the week, but stayed around its largest since November 2015.

LME LEAD: Lead was 1.8 percent lower at $2,253.50 a tonne, pressured by falls in sister metal zinc as well as chart-based selling after prices broke below the 100-day moving average at $2,269.

WIDER MARKETS: Stocks and the dollar recovered after early falls when a US official played down the risks of escalation following an attack by the United States on a Syrian air base. Oil prices held near one-month highs.

GERMANY ECONOMY: German industrial output surged in February and the trade balance swelled in what the Economy Ministry said was an "extraordinarily" robust start to the year.

M&A: Deal value in the metals and mining sector in March was up 11 percent on the previous month but 6 percent lower year-on-year, GFMS analysts said.