LONDON: Copper prices in London fell to the lowest level in three weeks on Friday as reduced bets for an early Federal Reserve interest rate cut lifted the dollar, making metals more expensive for holders of other currencies.

Three-month copper on the London Metal Exchange (LME) fell 0.4% to $8,432.5 per metric ton by 1109 GMT, after hitting its lowest since Dec. 13 of $8,416.

Data on Thursday showed that U.S. weekly jobless claims fell more than expected last week, setting the dollar on track for its steepest weekly rise since May.

“Metals are under pressure on increasing signs that the Fed won’t start cutting rates as soon as expected after US jobs data released this week,” said Ewa Manthey at ING.

“If US rates stay higher for longer, this would lead to a stronger US dollar and weaker investor sentiment, which in turn would translate to weaker metals prices.”

Copper slips as firm dollar outweighs thin inventories

Sings of tightening supply and thin stocks in top consumer China are, however, supporting copper.

Russian miner Udokan Copper is assessing damage after a fire at its plant, which was expected to start copper cathode production in 2024. A delay would add to the growing list of supply disruptions in the industry.

With declining growth from mine output, the global refined copper market faces a growing deficit in 2025 to 2027, CITIC Securities said.

On the technical front, copper is hemmed in by the 21-day moving average at $8,485 and the 200-day moving average at $8,402.

LME nickel fell 0.4% to $16,000 a ton, after hitting its lowest since Nov. 27 of $15,895. The metal is down 3.7% since the start of 2024 after a 45% fall in 2023 amid rising output in Indonesia and recent growth of stocks in LME-registered warehouses.

“A persistent surplus in the nickel market suggests that prices are likely to remain largely under pressure through 2024,” Manthey said.

Aluminium lost 1.1% to $2,257, zinc slid 0.3% to $2,531.5, tin fell 2.4% to $24,240 and lead rose 0.4% to $2,050.5.