London copper eyes biggest weekly loss since August

By: | Published: March 10, 2017 10:31 AM

London copper steadied on Friday after six straight sessions of decline but was on track to log its steepest weekly loss since August after an influx of deliveries into exchange warehouses this week doused near-term supply concerns.

Three-month copper on the London Metal Exchange traded flat at ,690 a tonne by 0326 GMT, after a drop of 1.4 percent in the previous session when prices plumbed ,652 a tonne, the lowest since Jan. 10. (Reuters)

London copper steadied on Friday after six straight sessions of decline but was on track to log its steepest weekly loss since August after an influx of deliveries into exchange warehouses this week doused near-term supply concerns. LME copper stocks surged by 38,775 tonnes to 327,300 tonnes, latest data showed, bringing total inventories to the highest since December and raising concerns about demand in Asia. Stocks have jumped by more than half since the start of March as traders have opted to deliver rather than pay soaring fees to roll contracts. The cost to hold metal for a day spiked to $10 this week. “The slide in commodities, triggered by rising stockpiles earlier this week, continued as investors cut bullish bets built up over the course of the year,” ANZ said in a report.

In the immediate term, trade was quiet, as markets awaited U.S. nonfarm payrolls report for February.

Three-month copper on the London Metal Exchange traded flat at $5,690 a tonne by 0326 GMT, after a drop of 1.4 percent in the previous session when prices plumbed $5,652 a tonne, the lowest since Jan. 10.

Copper is on course for a 3.8 percent weekly decline, the largest such drop since late August.

Shanghai Futures Exchange copper eased 0.8 percent to 46,430 yuan ($6,717.40) a tonne.

Also easing concerns over supply, BHP Billiton, may try to restart production at the world’s No.1 copper mine Escondida in Chile using temporary workers once a strike surpasses 30 days.

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China will move forward with restructuring central government enterprises this year, and focus on the steel, coal, heavy equipment and coal-fired power sectors.

It still has work to do cleaning up its skies, with poor enforcement of environmental laws and inadequate monitoring, the environment minister said on Thursday. A more severe crackdown could impede its production of metals.

A steep drop in China’s aggregate financing, seen as a proxy for credit available to store metals, spooked traders that Beijing may be clamping down on the type of credit used by the metals industry.

LME nickel was tracking towards an 8 percent weekly drop, the widest since May 2015, on concerns that mine supply from the Philippines may pick up just as Indonesia resumes exports.

Philippine President Rodrigo Duterte could reappoint the environment minister who ordered more than half the country’s mines shut down, as Congress appears set to defer a decision on her confirmation.

 

 

($1 = 6.9119 Chinese yuan renminbi)

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