US strike on Syria, China sell-off weigh on copper

LONDON — Copper fell on Friday after a US missile strike on Syria prompted investors to move out of riskier assets while the biggest sell-off in Chinese steel futures in two months spilled over into industrial metals.

Base metals were on the defensive following falls in the previous session, said Alastair Munro at Marex Spectron.

“If we’re going to see an unwind of risk you’ll see metals come under pressure,” he said.

Three- month copper on the London Metal Exchange (LME) closed down 0.40% at $5,834 a ton, ending the week barely changed.

Copper dipped below key technical support at its 100-day moving average of $5,797 earlier in the session.

The discount of LME cash copper to the three-month contract was at $32 a ton, close to the biggest in four years, indicating adequate supply of refined metal in the market.

UNDER PRESSURE

Base metals came under pressure after rebar on the Shanghai Futures Exchange closed down 4.90%, its sharpest fall since Feb. 3, on concerns of rising steel supply and tepid demand.

Zinc ended 1.30% lower at $2,690 a ton. The metal used for galvanizing steel had broken a long-term up-trend line from its January 2016 low, said Alastair Munro at Marex Spectron. He said technical support for the metal was at $2,640-2,650.

The discount of LME cash zinc to the three-month contract shrank to $ 23.80 a ton from $ 27.75 earlier in the week, but was still around its largest since November 2015.

Lead ended 1.90% lower at $2,251 a ton, pressured by falls in sister metal zinc as well as chartbased selling after prices broke below the 100-day moving average at $2,269.

Stocks and the dollar recovered after early falls when a US official played down the risks of escalation following an attack by the United States on a Syrian air base.

But US stocks dipped after US non- farm payrolls showed job growth slowed sharply but the unemployment rate fell to a near 10-year low.

Deal value in the metals and mining sector in March was up 11% on the previous month but 6% lower year on year, GFMS analysts said.

Among other industrial metals, LME aluminum closed up 0.50% at $1,962 a ton. Nickel was 0.90% higher at $10,180, and tin finished down 0.30% at $20,250. —