SYDNEY: London copper was little changed on Friday as a dollar-rally threatened to extinguish its modest monthly gains, and as traders said further strength in the greenback may erode prices going into November.
The US dollar held at four-week highs against a basket of major currencies early on Friday, getting another boost from encouraging growth data a day after the Federal Reserve gave an upbeat assessment on the economy.
"We have a call for a modest downside in the price to just below $3 a pound ($6,600 a tonne). But too much below that, you see scrap supply drying up and China is pretty price-sensitive at those levels," said analyst Daniel Morgan at UBS in Sydney.
Three-month copper on the London Metal Exchange was trading flat at $6,738 a tonne by 0309 GMT, after dropping 1.2 percent the session before.
A smaller trade deficit and surge in defence spending buoyed US economic growth in the third quarter, but domestic demand slipped, hinting at some loss of momentum.
LME copper hit its highest in six weeks at $6,835.50 a tonne on Wednesday, with a gradual rise supported by tighter than expected refined supply against a backdrop of soft if steady demand.
The global copper market will be in deficit for a fifth straight year in 2014 before switching to a surplus of about 390,000 tonnes next year, an industry group said this week.
Elsewhere, there are indications Zambia may be backing away from plans to impose a 20 percent royalty rate on open pit mining in the country, a top executive with Barrick Gold Corp said on Thursday.
The most-traded January copper contract on the Shanghai Futures Exchange eased 0.5 percent to 47,500 yuan($7,772) a tonne.
"There will be more interesting commodities than copper in the next 12 months - like nickel," said Morgan at UBS.
"Bad weather in the Philippine will offer a headwind to (ore) supply and you'll get a lift in prices," he added.
China's nickel pig iron producers are drawing down their stockpiles faster in the past month due to disruptions in Philippine ore exports, refuelling supply worries and fanning a nickel rally, industry sources said.
LME nickel prices are up 5 percent this week at $15,751 a tonne, paring a monthly loss to around 3 percent, after prices collapsed from around two-year highs seen in May.
Meanwhile, commodity trading giant Trafigura could raise its stake in Belgium's Nyrstar, strengthening its grip on the world's largest zinc producer as tighter supplies and mine closures are forecast to boost prices for the metal.
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