LONDON: Copper prices eased on Wednesday, hurt by a firmer dollar and persistent worries about the economy in top metal consumer China, while nickel extended gains.
Three-month copper on the London Metal Exchange (LME) was a touch weaker at $8,472 a metric ton in official open outcry trading, after rising 1.3% in the previous session due to disruptions at major mines.
“The prospect for tightening supply from disruptions is sending quite a bit of a warning signal into 2024,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. “For now, copper is consolidating, but I think the uptrend is pretty solid.”
Analysts said reduced supply from major copper producers Panama and Peru could flip the global copper market into a deficit from surplus in 2024.
Panama’s president said on Tuesday that First Quantum’s Cobre Panama copper mine would be shut down, hours after the country’s Supreme Court declared its contract unconstitutional.
However, nickel prices surged, with the Shanghai contract jumping the most in nearly five months, as short position holders exited amid potential changes in pricing mechanism in top supplier Indonesia. LME nickel rose 1.4% to $16,995 per ton, while the most-traded January nickel contract on the Shanghai Futures Exchange climbed as much as 5.7%.
The gains were driven by prospects of change in pricing of the metal in Indonesia, which has mostly been based on the LME high-purity metal contract.
LME nickel has lost 43% so far this year, and prices on SHFE have been down 36% in the same period. The metal is the worst performer across base metals on both exchanges. LME aluminium was little changed at $2,217.50 a ton, lead eased 0.7% to $2,140, zinc dropped 0.8% to $2,518, while tin added 0.2% to $23,365.