METALS-Copper prices slip after U.S. inflation boosts dollar

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*Graphic-2021 Asset Returns: (Across updates, London adds dateline)

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LONDON, Nov 12 (Businesshala) – Copper prices fell on Friday as the dollar strengthened on rising bets by investors the US Federal Reserve will tighten monetary policy faster than expected.

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A surprisingly strong reading of US inflation this week pushed the dollar to its highest level since July 2020, making the price of commodities in the greenback more expensive for holders of other currencies.

Interest rate hikes could reduce liquidity in financial markets and slow recovery in the world’s largest economy.

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“The dollar has strengthened since the release of US CPI data,” said ING analyst Wenyu Yao.

Yao said concerns over the financial health of China Evergrande, which paid off last-minute bonds to avert default, and a possible transition to the rest of the asset sector, hinged and weighed on copper.

Benchmark copper on the London Metal Exchange (LME) rose 0.2% to $9,613 a tonne by 1230 GMT, but is still up about 1% at the end of the week.

Power cuts: China’s power cuts cut the country’s annual aluminum production capacity by 7%, but only 1% of copper, said consultancy firm Wood Mackenzie.

Inventory: Losses were cushioned by tight inventory at the Exchange Warehouse MCUSTX-TOTALcu-stx-sgh,

On a weekly basis, Shanghai Copper rose 1.5% to 38,037 tonnes and while on-warrant copper stocks climbed to 49,900 tonnes, inventories were still at historically low levels.

Premium: LME cash copper premium on a three-month contract MCU0-3 It was $207 a tonne, compared to a record $1,103.50 a month ago.

Nickel: The anti-monopoly agency in Indonesia, which has banned the export of unprocessed nickel, is investigating whether they engaged a domestic nickel smelter and a surveyor in unfair business practices that resulted in the production of nickel ore. There has been poor pricing.

Other metals: LME aluminum rose 0.8% to $2,681 a tonne, zinc fell 0.8% to $3,254, lead shed 0.6% to $2,352, tin rose 0.6% to $37,920 while nickel was flat at $19,765. (Reporting by Zandi Shabalala; Editing by Krishna Chandra Eluri)


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