The most-traded copper contract on the Shanghai Futures Exchange dropped 1.1 percent to 45,520 yuan ($6,545) a tonne on Wednesday as the US dollar lost some of its steam. The dollar moved back towards a 14-year peak as US debt yields resumed climbing, making dollar-denominated assets such as copper less expensive for holders of other currencies.
ShFE nickel was down 1.48 percent 85,130 yuan ($12,240) a tonne. ShFE aluminium was 0.28 percent lower, while ShFE lead settled 0.11 percent up. Elsewhere, nickel was initially driven to fresh 3-1/2-month lows after big overnight losses in London on expectations Indonesia may ease restrictions on exports of ore soon, filling a gap in supply caused by the closure of nearly a dozen mines in the Philippines for environmental reasons.
The Indonesian Association of Mineral Entrepreneurs has asked the government to allow exports of low-grade nickel ore. Indonesia has tried to limit exports of metal ores to encourage local mining companies to build their own smelters to process the ore locally. But the government has also made some concessions on this policy after protests from the mining industry.
Capital Economics commodities analyst Caroline Bain said a forecast deficit in global supplies of nickel this year would bolster prices as the year wore on. "Our end-2017 forecast for the price of nickel is $12,000 per tonne," she said in a note.
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