Nov 22 (Reuters) – London copper prices fell on Monday, weighed down by a robust dollar and higher warehouse inventories and as U.S. policymakers debated whether to withdraw economic support faster than expected.
Three-month copper on the LME CMCU3 was down 0.5% at $9,603 a tonne, as of 0306 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 gained 1.2% to 70,320 yuan ($11,014.52) a tonne, tracking Friday’s gains in London.
A stronger dollar makes greenback-priced commodities more expensive to buyers holding other currencies.
An early rate hike by the U.S. Federal Reserve could reduce liquidity in financial markets and slow recovery in the world’s biggest economy. Copper is often used as a gauge of global economic health.
On-warrant inventories in LME warehouses MCUSTX-TOTAL stood at 62,575 tonnes, their highest since Oct. 11.
Meanwhile, fresh coronavirus-led restrictions in Europe weighed on market sentiment.
FUNDAMENTALS
* China’s central bank on Friday said it would keep its prudent monetary policy “flexible and targeted” and strike a balance between economic growth and risk controls.
* Copper premiums in China spiked to a record high last week as an administrative issue over value-added tax (VAT) on imports exacerbated tight supply amid decade-low inventories in the world’s biggest consumer of the metal.
* ShFE aluminium SNIcv1 gained 1.2% to 18,980 yuan a tonne, nickel SNIcv1 climbed 2.3% to 148,030 yuan a tonne and zinc SZNcv1 rose 1.1% to 22,865 yuan a tonne.
* LME aluminium CMAL3 slipped 1.1% to $2,649 a tonne, nickel CMNI3 eased 0.4% to $19,960 a tonne, zinc CMZN3 dropped 0.7% to $3,214 a tonne and lead CMPB3 rose 1.3% to $2,243.5 a tonne.
* For the top stories in metals and other news, click TOP/MTL or MET/L
MARKETS NEWS
* The safe-haven dollar traded close to a 16-month high to the euro on growing anxiety over the impact of surging COVID-19 infections in Europe. USD/
* Asian stocks made a soft start to the week while oil and the euro were under pressure, as the return of COVID-19 restrictions in Europe and talk about hastened tapering from the Fed put investors on guard. MKTS/GLOB
DATA/EVENTS (GMT)
1500 EU Consumer Confid. Flash Nov
1500 US Existing Home Sales Oct
($1 = 6.3843 Chinese yuan)
(Reporting by Eileen Soreng in Bengaluru; Editing by Subhranshu Sahu)
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