LONDON: Copper prices eased on Wednesday, hurt by a firmer dollar and persistent worries about the economy in top metal consumer China, while nickel extended gains.
Three-month copper on the London Metal Exchange (LME) edged down 0.1% at $8,466 a metric ton at 1000 GMT, after rising 1.3% in the previous session due to disruptions at major mines.
“The prospect for tightening supply from disruptions is sending quite a bit of a warning signal into 2024,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“For now, copper is consolidating, but I think the uptrend is pretty solid.”
Analysts said reduced supply from major copper producers Panama and Peru could flip the global copper market into a deficit from surplus in 2024.
Copper nudges higher on China stimulus hopes, nickel bounces
Panama’s president said on Tuesday that First Quantum’s Cobre Panama copper mine would be shut down, hours after the country’s Supreme Court declared its contract unconstitutional.
In Peru, however, a strike at the Las Bambas copper mine, originally organized for an indefinite period, will end on Thursday, a workers’ union said.
Also weighing on the market was the dollar index rebounding from three-month lows, making greenback-priced commodities more expensive for buyers using other currencies.
Chinese equity markets slumped on Wednesday while a Reuters poll forecast that China’s manufacturing activity likely contracted for a second consecutive month in November.
However, nickel prices surged, with the Shanghai contract jumping the most in nearly five months, as short position holders exited amid potential changes in pricing mechanism in top supplier Indonesia.
LME nickel rose 1.4% to $16,995 per ton, while the most-traded January nickel contract on the Shanghai Futures Exchange climbed as much as 5.7%.
The gains were driven by prospects of change in pricing of the metal in Indonesia, which has mostly been based on the LME high-purity metal contract.
LME nickel has lost 43% so far this year, and prices on SHFE have been down 36% in the same period. The metal is the worst performer across base metals on both exchanges.
LME aluminium fell 0.3% to $2,211.50 a ton, lead eased 1.2% to $2,128.50, zinc dropped 1% to $2,512 while tin was little changed at $23,330.
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