Markets

Copper slips on worries about demand, nickel at new low

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Copper had touched a five-month low on Thursday as inventories in London Metal Exchange warehouses surged, fuelling worries about demand.

"The second quarter started off pretty modestly, we're not getting the uptick in physical buying that we expected and markets are still fairly well supplied across the board," Robin Bhar, head of metals research at Societe Generale in London, said.

"A few cracks may be appearing, but I don't think these are long lasting. I think we'll hold these key support levels around current prices and look to consolidate after this week's sharp falls."

COPPER: Three-month copper on the London Metal Exchange was down 0.1 percent at $5,538 a tonne at 1400 GMT. In the previous session, copper hit $5,494, the lowest since Jan. 4.

LME STOCKS: Inventories in London Metal Exchange (LME) warehouses climbed by 36,800 tonnes, exchange data showed on Friday, bringing this week's surge to 40 percent.

"I don't think it's new material, it's metal washing around in the system," Bhar said.

"The bottom line is, however, when you get inventory increases for whatever reason, it does suggest that maybe demand's not doing too well."

ALUMINIUM: The LME price of the metal that needs huge amounts of energy to produce shed 0.3 percent at $1,906.50, as oil prices hovered close to five-month lows.

"This oil move (lower) might just tip the scales on the aluminium price ... it should mean enough to bring the sellers to the bearish party," Matt France, head of institutional metals sales in Asia for broker Marex Spectron, said in a note.

NICKEL: LME nickel declined 0.3 percent to $8,985 after touching $8,905, the weakest since June 24 last year.

PHILIPPINES: Investors have been worried about additional nickel supply coming from the Philippines after the removal of the country's environment minister, who had led a crackdown on mining.

ZINC: The LME price of the metal mainly used for galvanising steel fell 0.1 percent to $2,566.50 after further losses in steel and iron ore prices.

JOBS DATA: Weighing on metals was US data that showed job growth rebounded sharply in April which could help boost the case for an interest rate hike next month.

 

 

Copyright Reuters, 2017