Copper prices edged down on Thursday as a firmer dollar and risk reduction ahead of a long Chinese holiday weekend weighed on sentiment, although worries over supply disruptions at major Chilean mines limited losses.
Benchmark three-month copper CMCU3 on the London Metal Exchange was slightly weaker at $14,616.50 a metric ton by 1610 GMT, having slipped to $14,526 earlier.
Copper, used in power and construction, is up 9% so far this quarter, having hit a record high of $14,875 a ton two weeks ago.
Financial markets in top metals consumer China have closed for the Mid-Autumn Festival. Trading will resume on Monday.
“China is out, but really it’s the macro weight,” said Alastair Munro, senior base metals strategist at Marex.
The dollar held near a two-month high after a sharp rally, fuelled by expectations of additional Federal Reserve interest rate hikes. FRX/
A stronger US currency makes dollar-priced metals more expensive for buyers using other currencies, while the prospect of higher borrowing costs affects sentiment towards growth-dependent metals such as copper.
China’s stock markets saw their biggest one-day decline in a month on Thursday, as investors were sceptical that a meeting between US President Donald Trump and Chinese President Xi Jinping in Washington would deliver a broader breakthrough.
Meanwhile, the premium of the LME cash copper contract over the three-month benchmark CMCU0-3 widened to $107.5 a ton, the highest since September 1, from zero a week ago, signalling tightness for nearby supply.
Adding to supply concerns, operations at BHP’s (ASX: BHP) Escondida mine in Chile, the world’s largest copper mine, were suspended on Wednesday after a worker was killed in an accident.
Separately, two unions representing workers at Antofagasta Minerals’ ANTO.L Centinela copper mine in Chile called on workers to hold a strike vote, adding to concerns amid ongoing contract negotiations with workers at Escondida.
LME zinc CMZN3 was the best performer on the LME, erasing earlier losses to jump 1.5% to $3,961.50 a ton after Nyrstar said it was launching a strategic review of its loss-making Budel zinc smelting operations in the Netherlands.
LME aluminium CMAL3 slipped 0.1% to $3,253 a ton while nickel CMNI3 added 0.3% to $16,525, lead CMPB3 gained 0.5% to $1,929.50 and tin CMSN3 rose 0.2% to $54,005.
(Reporting by Polina Devitt; additional reporting by Eric Onstad; Editing by Eileen Soreng, Susan Fenton and Diti Pujara)
