Copper hit a 4-1/2 month peak on Friday, fuelled by strong growth in top copper consumer China, a weak dollar and worries about supply disruptions. The dollar hit a year low against a currency basket after the European Central Bank's chief abstained from talking down the euro, while obstacles to US President Donald Trump's policy agenda also weighed.
A weaker dollar makes dollar-priced copper cheaper for non-US investors. Also helping copper, China's economy expanded faster than expected in the second quarter, data this week showed, setting the country on course to comfortably meet its 2017 growth target. "Overall demand in China is not that bad at all," said Richard Fu, head of Asia and Pacific at LME Floor Member AMT.
"In general global economic figures are improving, there's supply disruptions here and there, plus the Chinese want to cut metal production in order to tackle pollution and over-capacity," he added. Three-month LME copper closed up 0.8 percent at $6,004 a tonne, having hit its highest since March 1 at $6,051.
Copper inventories in Shanghai Futures Exchange-monitored warehouses fell 4.9 percent from last Friday to their lowest since January. An estimated 5,000 workers at the giant Grasberg copper mine operated by Freeport-McMoRan Inc's Indonesian unit will extend their strike for a fourth month in a dispute over layoffs and employment terms.
The world refined copper market showed a 53,000 tonne deficit in April, compared with an 18,000 tonne deficit in March, industry data showed. The Asian Development Bank raised its 2017 and 2018 growth forecasts for China and other countries in the region.
Daily average primary aluminium output excluding China rose to 70,300 tonnes in June, from 70,000 tonnes in May, industry data showed. "Although sweeping production cuts were announced in recent months, especially in China, they have not been implemented so far or have been offset by new capacities. We see no justification for the high aluminium price," said Commerzbank in a note.
Aluminium closed down 0.1 percent at $1,915. Indonesia exported 403,201 tonnes of nickel ore in the first six months of 2017, when a complete ban on exports was lifted. Philippine President Rodrigo Duterte said the government will draft a new law for the country's mining industry. Worries over supply from the Philippines have faded since the country's firebrand environment secretary was replaced in May.
LME nickel ended up 0.3 percent at $9,520 a tonne. Discounts of cash copper, aluminium and lead to their three-month contracts were near multi-year highs, signalling ample nearby supply. Jobless claims fell more than expected to the lowest level in nearly five months, suggesting strong job gains that should continue to underpin economic growth. Zinc closed up 1 percent at $2,753, lead closed up 1.2 percent at $2,239 while tin ended up 0.8 percent at $20,225.
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