Thursday May 8, 11:12 AM
Metals - Copper eases as dollar strengthens but supply fears underpin UPDATE
(Updates prices, adds details)
LONDON (Thomson Financial) - Copper eased in early trade on Thursday, pressured by gains in the U.S. dollar, although expectations that supply will remain tight this year are underpinning prices.
A stronger greenback makes dollar-priced commodities such as base metals more expensive for holders of other currencies.
'The internal fundamentals for copper and a number of the metals remain bullish, but not bullish enough at present to counter the selling as commodity trades are closed as hedges against dollar weakness are unwound,' said William Adams, an analyst at BaseMetals.com.
Higher prices are pressuring Chinese buying, analysts said, while the resolution of a strike at Chilean state copper miner Codelco, which buoyed prices last week, is also weighing on the market.
However, production outages are still foremost in investors' minds, with some of Codelco's facilities still not up and running, and a new strike possible in Peru, the world's second-largest producer of the red metal.
At 10:50 a.m., London Metal Exchange copper for three-month delivery was trading at $8,420 per tonne against $8,430 per tonne at the close on Wednesday.
Later today, traders will be looking at the release of U.S. government figures for initial jobless benefit claims (1:30 p.m. BST) and wholesale inventories (3:00 p.m BST) to try to gauge the strength of the world's biggest economy, and the dollar's next possible move.
In other metals on the LME, lead was steady after yesterday dipping to its lowest level in 3 1/2 months, trading at $2,435 per tonne against $2,420 per tonne at the close on Wednesday.
Zinc for delivery in three months was down at $2,254 per tonne against $2,253, while aluminium was down at $2,908 per tonne against $2,920.
Nickel eased to $28,300 per tonne against $28,545, while tin traded higher at $24,400 per tonne against $24,000.
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