LME copper eases in holiday-thinned trade; other base metals flat or weaker

MELBOURNE — London metals started the week lower on Monday as a resurgent dollar dragged down prices from one-month highs hit the session before, while the Lunar New Year holidays reduced liquidity.

London Metal Exchange (LME) copper had slipped 0.80% to $7,189 a ton by 0628 GMT, erasing small gains from the previous session when prices hit the highest since Jan. 15 at $ 7,253. Volumes were exceptionally light across base metals with around 1,000 lots of turnover.

The Shanghai Futures Exchange ( SHFE) was closed for the Lunar New Year. Markets will reopen on Thursday, Feb. 22.

The dollar found some traction following last week’s steep fall and managed to hold above a three-year low against a basket of currencies.

Hedge funds and money managers cut their net long positions in COMEX gold and copper contracts in the week to Feb. 13, US Commodity Futures Trading Commission ( CFTC) data showed on Friday. The dealers cut their net long position in copper by 17,690 contracts to 36,119 contracts, according to the CFTC data, the lowest since May.

Refined copper remains in ample supply. COMEX copper stocks have doubled from this time last year to more than 225,000 tons. LME stocks were also at nine-month highs, due to inflows earlier this month. SHFE copper stocks were at the highest since August.

US Commerce Secretary Wilbur Ross unveiled options on Friday for President Donald Trump to impose hefty steel and aluminum import restrictions ranging from global tariffs on all products from all countries to quotas based on previous exports to the US.

US homebuilding rose to a more than one-year high in January, boosted by strong increases in the construction of both single- and multi-family housing units, and further gains are likely with building permits surging to their highest since 2007.

Nickel ore output in the Philippines, the world’s top supplier, dropped by 6% last year as several mines were under maintenance or temporarily closed due to environmental issues, the mines bureau said on Monday.

LME aluminum eased 1.5% after it closed 2% higher on Friday. Aluminum spreads have come under the most pressure since August, reflecting tightening supply. The premium for cash over three months widened to $10 as the major contract nears expiry, which is likely to trigger exchange deliveries.

Other metals were flat to lower, led by LME nickel that fell 1.2% after last week’s 7% rally. —