METALS-Copper eases for second day, demand outlook limits losses

  • London copper falls, taking 2-day decline to 2.2 percent
  • Commodity markets cautious ahead of British PM's speech
  • Nickel loses ground as Indonesia moves to boost exports

(Updates prices)

LME copper slid for a second session on Tuesday as a firmer U.S. dollar pressured the market, but expectations of strong demand in top consumer China put a floor under the market.

The pound hovered near three-month lows versus the dollar on Tuesday and stocks were mostly weaker as investors waited for British Prime Minister Theresa May to lay out plans to exit the European Union amid fears Britain will lose access to the single market.[MKTS/GLOB]

"The main issue in the market is Theresa May's speech on hard Brexit and as a result the dollar has strengthened, so we have some pressure on metals," Argonaut Securities analyst Helen Lau said.

"Fundamentals are fine, China's property market is on track to improve. It may scale back automobile purchase incentives but not significantly, so automobile production may continue to grow which is positive for copper."

Three-month copper on the London Metal Exchange CMCU3 had fallen 1.5 percent to $5,778 a tonne by 0729 GMT, extending losses from the previous session's 0.7-percent decline.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 closed down 1.2 percent to 47,320 yuan a tonne.

The copper market is being weighed down by a stronger dollar, with investors taking profits after prices climbed to a five-week high on Monday.

Strong Chinese demand and positive economic data from the United States are supporting base metals. Chinese customs data on Friday showed the country shipped in a record 4.95 million tonnes of copper in 2016.

U.S. retail sales rose in December amid strong demand for automobiles and furniture, providing further evidence that the economy ended the fourth quarter with momentum and is poised for stronger growth this year.

LME nickel CMNI3 slid 0.6 percent, adding to Monday's 1.8 percent decline, on pressure from Indonesia's move to ease a ban on nickel ore exports.

Indonesia introduced new rules last week that will allow exports of nickel ore and bauxite and concentrates of other minerals under certain conditions in a sweeping policy shift by the key global supplier.

PRICES

    Three month LME copper          CMCU3  
    Most active ShFE copper         SCFcv1  
    Three month LME aluminium       CMAL3  
    Most active ShFE aluminium      SAFcv1  
    Three month LME zinc            CMZN3  
    Most active ShFE zinc           SZNcv1  
    Three month LME lead            CMPB3  
    Most active ShFE lead           SPBcv1  
    Three month LME nickel          CMNI3 
    Most active ShFE nickel         SNIcv1   
    Three month LME tin             CMSN3  
    Most active ShFE tin            SSNcv1                


To read reuters' full disclaimer click here
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.