Copper prices slipped on Wednesday, taking their cue from currency markets where the dollar rose against the euro, analysts said. Lead for three-month delivery on the London Metal Exchange fell more than 5 percent to $2,420 a tonne, its lowest since January 22, on rising inventories and softer demand.
Copper ended at $8,430 from $8,520 on Tuesday. A firmer dollar makes industrial metals more expensive for holders of other currencies. "The metals are following currency moves in the absence of other direction," analyst Leon Westgate at Standard Bank said. The dollar gained broadly, supported by hawkish comments from a US Federal Reserve official that helped cement views that the bank's cycle of aggressive interest rate cuts may be nearing an end.
Analysts said the strike at the world's top copper producer coming to an end, also weighed on prices. Chilean copper giant Codelco's subcontract miners agreed on Monday to end their strike, after voting to accept a government proposal. Production will resume on Friday. Lead ended at $2,420 compared with $2,555 on Tuesday.
Physical traders said the market was softer because buyers had retreated and consumers were looking to use recycled material. Zinc ended at $2,250 from $2,280 despite workers at Namibia's biggest zinc producer Skorpion Zinc planning to strike on Friday. The mine, owned by Anglo-American, produces 150,000 tonnes of special high-grade zinc per year.
Aluminium ended at $2,924 a tonne from $2,973 and nickel at $28,500 from $28,900. Nickel used to stainless steel is expected to come under pressure from production cutbacks at leading Chinese stainless steel mills.
Tin was untraded at the close, but quoted at $24,000/24,005 from $24,100. Earlier it hit $24,400, within striking distance of its record high of $24,600 a tonne hit on April 24.
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