Copper clocks biggest weekly fall in a month

Copper clocked its biggest weekly fall in a month on Friday as the dollar soared to a 14-year high and traders decided a rally driven by US president-elect Donald Trump's economic policies was overdone, for now. The metal surged more than 11 percent last week in its biggest weekly gain since October 2011 as investors bet Trump's plan to hike US infrastructure spending and cut taxes would boost the world's top economy.
Since hitting a 17-month high above $6,000 on November 11, however, copper has dropped nearly 10 percent, hurt in the latest instance by Federal Reserve Chair Janet Yellen comments that US interest rates could rise "relatively soon". "Prices overshot before on hopes for the infrastructure spending. The stronger dollar is also contributing to the fall. Probably (prices) will tread water going forward because positive expectations are already priced in," said Commerzbank analyst Eugen Weinberg.
Three-month copper on the London Metal Exchange ended down 1.3 percent at $5,423 a tonne, marking a weekly fall of 2 percent. Trump's election as US president has done nothing to change the Fed's plans for a rate increase "relatively soon," Yellen said on Thursday, as data suggested the US jobs market is tightening and inflation is gaining traction. Also weighing on copper, China's booming property market showed early signs of a softening in October after a price rally that propped up economic growth this year.
China's biggest copper smelter, Jiangxi Copper, has agreed to a 5 percent drop in fees to process concentrate for Freeport-McMoRan Inc in 2017, sources said. "The reduction likely reflects expectations that global mine supply will remain fairly flat next year after growing around 4 percent this year," Commonwealth Bank of Australia said in a note.
Zinc, used to galvanise steel, ended up 0.2 percent at $2,537. In a bid to fight pollution, China has ordered industrial plants including steel mills to suspend production, focussing its efforts in the top steel producing province of Hebei.
Nickel ended down 3.4 percent at $10,855. Sherritt International Corp's joint nickel venture in Cuba will return to profit next year if prices for the metal remain at the current level. Lead closed down 1.4 percent at $2,139, aluminium gained 0.4 percent to end at $1,694 while tin closed flat at $20,200.