Copper down on rising stockpiles, strike threat curbs losses

LONDON: Copper prices eased for a fourth straight session on Wednesday on a surge in warehouse stocks but the threat of strike action at two Chilean mines curbed losses.

Benchmark copper on the London Metal Exchange slipped 0.7 percent to a one-week low of $5,845.50 per tonne in official trade.

"The threat of a strike will restrict the downside, without that sort of news the price might have fallen much further," said Robin Bhar, an analyst at Societe Generale.

"The supply side and disruptions are to some extent offsetting the more bearish news surrounding the stock increases."

STOCKS: On-warrant copper inventories in LME warehouses - those not earmarked for shipment and available to investors - have soared by 47 percent to 213,900 tonnes since June 28 after inflows into mostly Asian depots, LME data showed.

ANTOFAGASTA: A decline in copper prices was offset by news that Chilean miner Antofagasta was facing potential strikes from workers and supervisors at two of its mines as contract talks continue.

POTENTIAL STOPPAGE: The combined annual production at both Chilean mines is 160,000 tonnes of copper.

TECHNICALS: Prices, which failed near resistance at $6,000 a tonne, are now easing to support at the 100-day moving average of $5,774.

CHINA: China's services sector grew at a slower pace in June as new orders slumped, signalling renewed pressure on businesses and pointing to a softening outlook for the economy of the world's largest consumer of commodities such as copper.

DOLLAR: A softer dollar has helped underpin prices as it makes dollar-denominated products cheaper for non-US buyers, potentially boosting demand.

BAUXITE, NICKEL: Indonesia has issued recommendations to two more companies to allow them to export mineral ores.

NICKEL: Nickel was bid down 0.9 percent to a one-week low of $9,100 adding to a 2.2 percent decline made in the previous session on plentiful supply from Indonesia and the Philippines.

PRICES: Aluminium inched down 0.5 percent to $1,919, lead was bid down 1.4 percent to $2,266, tin was bid down 0.1 percent to $19,925 while zinc was bid 0.9 percent lower at $2,767.