Copper slips to 4-week low as China concerns and strong dollar weigh

LONDON — Copper prices hit their lowest in nearly four weeks on Tuesday due to worries about demand from top consumer China and a stronger dollar ahead of a monetary policy decision from the US Federal Reserve.

Benchmark copper on the London Metal Exchange (LME) ended down 0.90% at $ 6,745 a ton from an earlier $ 6,710, its lowest since April 4.

Chinese demand for industrial metals typically picks up in the second quarter ahead of construction activity over the summer months.

DOLLAR: A rising US currency makes dollar- denominated commodities such as copper more expensive for non- US companies, which could potentially subdue demand. The Fed’s monetary policy decision is due today (Manila time).

CHINA: Data from Chinese banks suggest that the campaign to clamp down on riskier lending practices and shadow banking without stunting economic growth may be succeeding.

Profit growth at Chinese industrial firms slowed to its weakest pace in more than a year in March, as policy makers navigate debt risks and a heated trade row with the US.

DEMAND: China accounts for nearly half of global copper demand estimated at around 24 million tons this year.

TECHNICALS: Traders say the break below the 200day moving average at around $ 6,800, if sustained, could see copper prices head towards the March low at $6,532.

NEGOTIATIONS: Nervousness about supply disruptions due to talks over labor contracts in Chile are expected to support prices of the metal used widely in the power and construction industries.

“Supply disruption concerns for 2018 have appeared overblown — with a growing list of Chilean labor contracts settled without incident,” Morgan Stanley analysts said in a note.

ALUMINUM: Prices hit a seven-year peak of $2,718 on April 19 after the US imposed sanctions on Rusal, one of the world’s largest aluminum producers.

An extension of the deadline to Oct. 23 from June 5 to wind down business with Rusal have since seen aluminum prices drop more than 15%.

PRICES: Aluminum rose 0.40% to $2,260 a ton, zinc fell 2.4% to $3,052, lead down 1.2% to $ 2,293, tin added 0.20% to $21,210 and nickel slipped 0.10% to $13,655. —