Copper slid from near a one-month high on Friday as a stronger dollar weighed on the market and planned output cuts by miners failed to ease concerns over ample supplies. Benchmark copper on the London Metal Exchange closed 0.4 percent lower at $5,285 a tonne, after climbing near a four-week high earlier in the day. Copper prices fell as better-than-expected US data on industrial output and consumer sentiment lifted the dollar, making metals denominated in the currency more expensive for non-US buyers.
"It's likely a function of the strength in the dollar," said Matthew Hasson, sales specialist in mining at Numis. "As the dollar started gaining strength, metals started selling off." The market was also pressured by renewed oversupply concerns, as copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 11.4 percent.
LME-approved warehouse inventories, meanwhile, dropped to a new eight-month low of 292,950 tonnes, down more than 20 percent since a peak in late August. But they have still risen nearly 66 percent this year, suggesting robust global inventories. Ample stocks offset previous upbeat sentiment on the back of output reductions, even as Chile's Antofagasta Plc became the latest producer to cut back its copper exploration activities.
"When you get down to lower price levels, which we expect in the next six to 12 months, you will see more supply cuts," said Richard Knights, analyst at Liberum. "But we haven't seen enough yet to rebalance the market." A recent rollback in output has helped copper prices rebound from six-year lows, bolstering confidence the industry is adjusting to slowing demand growth in China, which accounts for nearly half of global copper consumption.
But concerns persist ahead of Chinese third-quarter GDP data on Monday. China's economic growth is forecast to slow to 6.5 percent in 2016 from an expected 6.8 percent in 2015, a Reuters poll showed. Recent weak Chinese data has fuelled expectations for further economic stimulus measures, including a boost to infrastructure spending that could help copper demand in the short term. Aluminium was untraded at close but bids slid 0.1 percent to $1,572 a tonne.
Lead closed 0.9 percent higher at $1,811.50, tin eased 0.2 percent to $16,025 and nickel gained 0.4 percent to $10,590. Zinc closed down 1.4 percent at $1,807, ending the week nearly two percent lower. The metal gained 10 percent last week, after Glencore said it would cut its zinc production by 500,000 tonnes. The market is heading towards its fifth straight deficit next year and prices are expected to reach $2,275, Deutsche Bank said in a note.
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