Copper descends

Copper hit a week low on Tuesday as the dollar rallied and investors feared the first US interest rate rise in nearly a decade could trigger a default among highly leveraged miners. The dollar firmed after data showed US inflation pressures rose in November, cementing expectations for a rate hike by the Federal Reserve on Wednesday.
A strong dollar makes dollar-priced metals costly for non-US investors. Three-month copper on the London Metal Exchange ended down 2.4 percent at $4,565 a tonne, having hit a week-low of $5,554 earlier. "Investors are worried that a big miner might default ... this is impacting metals, it's a sentiment thing," said Gianclaudio Torlizzi, partner at T-Commodity.
But he added: "The fundamentals are getting better ... China is stabilising." China's factory output growth reached a five-month high in November, signalling a flurry of stimulus measures by Beijing may have put a floor under the economy. China consumes nearly half of the world's copper. Copper appears to have found a near-term floor around $4,500, just above November's 6-1/2 year lows, with traders expected to close short positions into the year end. "I'm encouraged by the resilience in the base metals sector, unlike in precious or oil," said a trader in Mumbai.
China's top smelter Jiangxi Copper and Chilean miner Antofagasta Minerals have agreed 2016 treatment and refining charges 9 percent lower than this year's fees, a signal that concentrate supply is tightening. Other metals also fell, hurt by oversupply even though producers have cut back output. "There needs to be consensus about cutbacks, we hear stories in China that some are cutting back but some are overproducing," said a metals broker. Aluminium closed down 1.4 percent at $1,471 a tonne.
Century Aluminium began shutting one of the two potlines at its South Carolina smelter on Monday, even as a potential deal to keep the plant operating at reduced capacity gathered steam. Nickel closed down 2.3 percent at $8,550. The global nickel market moved to a deficit of 400 tonnes in October from a surplus of 8,500 tonnes the previous month, revised figures from the International Nickel Study Group showed on Tuesday. Zinc ended down 3.2 percent at $1,504, at its lowest point since mid-November, lead closed down 1.7 percent at $1,708, while tin ended down 1.2 percent at $14,550.