Copper ends week lower on US rate prospects

Copper prices ended slightly lower on Friday, finishing the week a little softer as the dollar largely retained recent gains on expectations that the US Federal Reserve would raise interest rates this month. Though the dollar eased on Friday, the previous two days' gains served to outweigh concerns over a strike at the world's largest copper mine in Chile.
A stronger greenback makes dollar-denominated assets such as copper more expensive for holders of other currencies. The US Federal Reserve has been propelled towards what could be a first sustained series of interest rate increases in more than a decade by a surge in business and consumer confidence during President Donald Trump's first weeks in office despite a lack of policy detail from the administration.
"I'm surprised that we haven't seen more of a move up in copper given the supply disruptions, but obviously weighing on copper is the heightened prospect that we could have a rate hike in March," said Capital Economics senior commodities economist Caroline Bain.
Three-month copper on the London Metal Exchange closed 0.2 percent weaker at $5,917 a tonne, on track to end the week about 0.3 percent down. Prices have consolidated in a $5,800-$6,200 range since hitting a 20-month high of $6,204 on February 13. Bain said the market was also anticipating an announcement of an increase in Chinese infrastructure spending during a 10-day meeting of the National People's Congress starting on Sunday.
Data from China this week, including manufacturing and service sector activity, cast doubt over the sustained growth of the world's second-largest economy and largest copper consumer. Although the factory activity in China expanded faster than expected Bain said there were signs that the construction sector was slowing, which is negative for copper. "There are some doubts starting to creep in about how sustainable Chinese demand is going to be this year," she said.
Elsewhere, the Philippines could consider banning exports of unprocessed minerals such as nickel in an effort to promote value addition in the mining sector, a senior environment official said on Friday. Nickel was the biggest gainer among LME metals, rising 1.9 percent to $10,990 a tonne to close the week 1.2 percent higher. Tin fell 0.8 percent to $19,500 while zinc slipped 0.2 percent to $2,775 a tonne. Lead shed 0.2 percent to $2,249.50 a tonne and aluminium was down a percent to $1,892.