Copper lower, zinc spreads jump

Copper closed lower on Tuesday, extending four straight days of losses as oil prices retreated from the previous session's more than two-year high and the dollar strengthened. "Base metals prices this morning were supported by the sharp rise in oil prices. Now oil is down, and the dollar is somewhat firmer, so this seems to be weighing on prices," Commerzbank analyst Daniel Briesemann said.
"Last week was the third week in a row that speculative financial investors withdrew from copper," he said. "It seems the base metals are losing support from one of the most important factors of the last few months, those speculators." London Metal Exchange copper ended the day down 0.6 percent at $6,411 a tonne. Prices touched their lowest since mid-August on Friday at $6,366 a tonne.
Brent crude prices fell on Tuesday after investors took profit after the previous session's rally to 26-month highs, spurred largely by threats from Turkey to cut oil exports from Iraq's Kurdistan region. World stocks and the euro fell for a fourth day, with investors that had piled into both all year taking a step back as the list of global uncertainties began to lengthen again.
This year looks set to be the "tipping point" for electric cars, global miner BHP's chief commercial officer said on Tuesday, with the impact for metals producers felt first in copper, where supply will struggle to match increased demand. LME zinc closed up 0.6 percent at $3,116 a tonne, while lead ended 0.5 percent higher at $2,488 a tonne.
Zinc stocks in LME-registered warehouses fell a further 1,600 tonnes on Monday, exchange data showed, and are down 39 percent this year. Another 20,350 tonnes of zinc warrants were cancelled, meaning metal had been earmarked for delivery and was no longer available to the wider market.
The premium of cash zinc to the three-month contract rose to its highest since early 2007 at $69, reflecting tight supplies of immediately available metal. The Asian Development Bank raised its outlook for China's economic growth this year on the back of strong domestic consumption, an export recovery and solid growth in services. LME tin closed little changed at $20,710, while nickel finished down 0.9 percent at $10,480 and aluminium ended 1 percent lower at $2,126.