Updates throughout, adds London dateline
LONDON, Nov 16 (Reuters) – Prices of industrial metals eased on Tuesday as the dollar firmed ahead of U.S. retail sales data and on positive sentiment from a virtual meeting between the leaders of the world’s largest economies.
The closely watched conversation between Chinese President Xi Jinping and U.S. President Joe Biden yielded no immediate outcomes but struck a positive tone and was seen as a chance to improve relations.
The dollar index =USD climbed to a 16-month high, making copper and other metals, priced in the U.S. greenback, less attractive to global buyers. FRX/
“(The interaction between U.S. and China) is positive, we saw what happened in 2019 and last year with the trade dispute: the macro suffered,” said independent analyst Robin Bhar, adding that there was a knock-on negative effect on base metals.
Benchmark copper on the London Metal Exchange CMCU3 eased 0.2% to $9,653 per tonne, by 1220 GMT.
Investors are awaiting U.S. retail sales data due later on Tuesday, which could also influence the outlook for interest rates.
OUTLOOK: Copper prices are expected to fall as we move into 2022 due to accelerated ramp-up of mine supplies and falling demand, mainly from the slowing Chinese construction sector that is the biggest end-user for the metal, Capital Economics said.
INVENTORIES: On-warrant copper inventories in LME-registered warehouses are at their highest in nearly a month at 53,175 tonnes MCUSTX-TOTAL
SPREAD: The premium of LME cash copper to the three-month contract CMCU0-3 has plunged to $32.50 from about $1,103.50 a month ago, pointing to easing concerns of nearby availability of metal.
ALUMINIUM: Prices for the light-weight metal were dragged down by falling prices of thermal coal CZCcv1, which lowered production costs for smelters in top producer China that are powered by the fossil fuel.
LME aluminium CMAL3 shed 1.2% to $2,625 a tonne, and has lost about 18% over the last month.
COAL OUTPUT: China said it would continue raising coal supply as part of attempts to cool prices and increase power generation capacity.
OTHER METALS: Zinc CMZN3 lost 0.3% to $3,207, lead CMPB3 gave up 0.3% to $2,320, tin CMSN3 was flat at $37,500 while nickel CMNI3 was down 0.2% to $19,565.
(Reporting by Zandi Shabalala; Editing by Ramakrishnan M.)
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