Copper falls on rising stock, strike threat curbs losses

LONDON — Copper prices eased for a fourth straight session on Wednesday on a surge in warehouse stocks but the threat of strike action at two Chilean mines curbed losses.

Benchmark copper on the London Metal Exchange (LME) slipped 0.90% to a one-week low of $5,841 per ton in official trade.

“The threat of a strike will restrict the downside, without that sort of news the price might have fallen much further,” said Robin Bhar, an analyst at Societe Generale.

“The supply side and disruptions are to some extent offsetting the more bearish news surrounding the stock increases.”

On-warrant copper inventories in LME warehouses — those not earmarked for shipment and available to investors — have soared by 47% to 213,900 tons since June 28 after inflows into mostly Asian depots, LME data showed.

A decline in copper prices was offset by news that Chilean miner Antofagasta was facing potential strikes from workers and supervisors at two of its mines as contract talks continue.

The combined annual production at both Chilean mines is 160,000 tons of copper.

Prices, which failed near resistance at $6,000 a ton, are now easing to support at the 100-day moving average of $ 5,774 per ton.

China’s services sector grew at a slower pace in June as new orders slumped, signaling renewed pressure on businesses and pointing to a softening outlook for the economy of the world’s largest consumer of commodities such as copper.

A softer dollar has helped underpin prices as it makes dollardenominated products cheaper for non- US buyers, potentially boosting demand.

Indonesia has issued recommendations to two more companies to allow them to export mineral ores.

Nickel ended 0.20% lower at $ 9,160 after touching a oneweek low of $9,070. The metal fell 2.20% in the previous session on plentiful supply from Indonesia and the Philippines.

“With the caveat that Indonesian and Philippine supplies are perennially liable to disruption, weaker demand seems likely to exert downward pressure on prices, with support seen at $8,700 and resistance at $10,000,” Sucden Financial said in its thirdquarter metals outlook.

Among other industrial metals, aluminum ended slightly firmer at $1,929, lead fell 1.50% to $ 2,265, tin lost 1.40% to $19,675 while zinc eased 0.40% to $2,781.50. —