Thursday May 8, 03:11 PM
Metals - Copper down on expectations for further dollar strength
LONDON (Thomson Financial) - Copper extended losses on expectations for further dollar gains after the greenback staged an impressive recovery in recent days.
Supply concerns limited losses, however.
'Metals seem to be caught among various crosscurrents for the moment, but having moved up so quickly when the dollar was weakening, a re-surging greenback seems to be working its magic in reverse,' said MF Global analyst Ed Meir.
At 2:51 p.m., London Metal Exchange copper for three-month delivery was trading at $8,320 per tonne against $8,430 per tonne at the close on Wednesday.
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.
In other metals on the LME, lead was steady after yesterday dipping to its lowest level in 3-1/2 months, trading at $2,418 per tonne against $2,420 per tonne at the close on Wednesday.
Zinc for delivery in three months was down at $2,225 per tonne against $2,253, while aluminium was down at $2,871 per tonne against $2,920.
Nickel eased to $27,875 per tonne against $28,545, while tin traded higher at $24,325 per tonne against $24,000.
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