LONDON: Copper prices and other metals were dragged down on Thursday by a stronger dollar, and as power constraints in top consumer China triggered worries over demand.
Talk of policy tightening in the United States has boosted the dollar, making greenback-priced metals more expensive for holders of other currencies.
“The dollar is up on some safe-haven buying with all the macro concerns around and the Fed tapering, which could be announced at the next meeting,” said independent commodities analyst Robin Bhar.
Benchmark copper on the London Metal Exchange (LME) shed 2.4% to $8,934 a tonne by 1550 GMT.
The metal, widely viewed as a gauge of the health of the global economy, was heading for its first quarterly drop in six.
LME tin — the smallest and most illiquid market on the exchange — plunged as much as 12% as power shortages in China hit consumers of the metal, said James Willoughby, analyst at the International Tin Association.
“The power shortages have changed the outlook for tin in the short term,” he said.
The metal clawed back losses to be 4.1% lower at $34,000.
INVENTORIES: Falling inventories have underpinned copper prices and helped to contain losses.
Stocks in warehouses monitored by the Shanghai Futures Exchange fell to their lowest since May 2009, down 2.5% to 43,525 tonnes from last Friday.
In warehouses registered with the LME, on-warrant stocks were at their lowest since June at 124,200 tonnes.
PREMIUM: The premium for cash LME copper over the three-month contract climbed to its highest since Aug. 23 at $19 a tonne, indicating near-term shortages of material in the LME system.
CHILE: Copper output in top producer Chile fell 4.6% year on year to 466,928 tonnes in August, the government’s statistics agency said.
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