LONDON: Copper snapped its three-day advance on Thursday, retreating as the dollar firmed, Omicron fears subsided and attention turned to the unwinding of US monetary stimulus.
The dollar index edged higher, making greenback-denominated commodities more expensive for buyers with other currencies.
While prices for the metal used in power and construction were supported by low inventories, there was pressure from cooling growth in top consumer China and the tightening of US monetary policy, said Concord House analyst Duncan Hobbs.
"There is a continuation of a tug of war between the bullish and bearish factors," he said.
"As we come towards end of the year, positioning is quite light and appetite is limited because people have generally done well this year and they don't want to throw that away in the last (few) weeks."
Benchmark copper on the London Metal Exchange (LME) lost 1.1% to $9,554 a tonne by 1240 GMT.
Prices are up 20% this year while a wider index of industrial metals is up nearly 30%.
Copper edges lower as Omicron caution outweighs China stimulus
Inventories: On-warrant LME-registered stocks rose to a one-month high of 76,250 tonnes. However, that is down 69% from an August high of 238,725 tonnes and down nearly a quarter this year.
The premium for LME cash copper over the three-month contract was at $14 a tonne, compared with a record $1,103.50 in October, pointing to easing tightness in nearby supplies.
Property: Developers China Evergrande Group and Kaisa Group were downgraded to "restricted default" by ratings agency Fitch because of non-payment of offshore bond dues, while a source said that Kaisa had started work on restructuring its $12 billion offshore debt.
The real estate sector accounts for a large share of copper consumption.
Nickel: China's Tsingshan Holding Group started producing nickel matte - an intermediate nickel product that can be processed into chemicals for electric vehicle batteries - in Indonesia.
Nickel prices shed 1.7% to $19,895.
Other Metals: LME aluminium rose 0.5% to $2,639 a tonne, zinc gained 0.5% to $3,327, lead shed 0.4% to $2,276 and tin was up 0.8% at $39,550.
Comments
Comments are closed.