Stronger greenback sends prices of copper lower

LONDON — Copper prices declined for a third day on Friday and most other industrial metals also fell after the US dollar hit a three-month high, making metals more expensive for holders of other currencies.

The stronger dollar and profit taking by investors was driving prices down, but the outlook was good, said Robin Bhar, head of metals research at Societe Generale. “We’re still holding at relatively high prices underpinned by economic growth and demand coming through, as reflected in inventory drawdowns,” he said.

Benchmark copper on the London Metal Exchange (LME) closed down 2.20% at $6,830 a ton after touching $6,782.50, the lowest since Oct. 11. The metal used in power and construction was set to end the week down 1.80%, the first weekly fall in five weeks.

Copper fell through support around $ 6,850 and closed just above the 21-day moving average at $6,824 a ton.

On-warrant inventories available to the market in LME-registered warehouses fell by 5,975 tons to 163,250 tons, down from 221,875 tons in mid- October and the lowest in six weeks, providing some support to prices.

The dollar rose to a threemonth high, potentially reducing demand for dollar- denominated metals, after the European Central Bank extended its bond purchases and the US House of Representatives voted to clear a procedural path for tax cuts.

China has met its target for cutting steel capacity this year but the country must continue pushing ahead with capacity reductions in other sectors including aluminum and cement, the industry ministry said on Friday.

Steel futures on the Shanghai Futures Exchange fell for a second day, ending the week 1.60% lower and putting pressure on stainless steel ingredient nickel and zinc, used to rustproof steel.

LME nickel did not trade but was bid down 1.40% at $ 11,580 a ton.

Zinc closed 1.60% lower at $3,172.50 a ton but was set for a weekly gain of 2.40%. Aluminum finished down one percent at $2,168 a ton, lead ended 2.30% lower at $ 2,424 and tin closed 0.10% higher at $19,875. —