LONDON: Copper prices slid on Monday as worries about higher freight costs receded after a container ship blocking traffic in the Suez Canal was refloated, while a stronger dollar reinforced negative sentiment.
Benchmark copper on the London Metal Exchange was down 0.9% to $8,879 a tonne at 1600 GMT. Prices have fallen 8% since hitting 9-1/2-year highs of $9,617 last month.
“Copper prices lurched lower after we saw the news about the ship in the Suez Canal,” a copper trader said. “There may still be a knock-on effect on costs and there is still a queue, but at least the canal isn’t blocked any more.”
Shipping traffic through Egypt’s Suez Canal resumed after a giant container ship which had been blocking the busy waterway for almost a week was refloated.
A rising US currency makes dollar-priced metals more expensive for holders of other currencies, which could subdue demand.
Weighing on copper are stocks in LME- registered warehouses. At 132,050 tonnes, they are up nearly 80% since the beginning of March.
However, cancelled warrants - metal earmarked for delivery - at 28% and two companies holding large numbers of warrants have stoked concern about availability on the LME market and created a premium for the cash over the three-month copper contract.
Support for industrial metals comes from a surge in profits at China’s industrial firms, highlighting a rebound in its manufacturing sector and a broad recovery.
Surveys of manufacturing activity in China later this week are expected to show activity expanded more quickly in March.
Aluminium fell 1.2% to $2,271 a tonne, zinc was little changed at $2,830, lead gained 0.5% to $1,963, tin slid 0.8% to $25,365 and nickel lost 1.0% to $16,230.