Metals: Copper Picks Up as Traders Eye Supply

   By David Hodari 
 

Copper prices climbed on Friday, snapping the selling seen so far this week amid supply concerns, while aluminum prices unwound as Washington's trade tariffs failed to excite traders.

Copper was up 0.39% at $6,854.50 a metric ton and aluminum was down 0.37% at $2,284 a metric ton in midmorning trading in London.

Gold prices edged 0.12% higher to $1,299.36 a troy ounce as prices hovered around the important $1,300 mark, with investors looking for fresh impetus.

While London Metal Exchange copper inventories jumped 19% on Thursday on the final day of May trading, investors' attention was focused elsewhere on the first of June, with labor talks due to begin at the world's largest copper mine, owned by BHP Billiton (BLT.LN) in Chile's Escondida.

A 44-day strike at the mine last year stymied production and provided uplift to copper prices.

Those negotiation-driven supply concerns follow the government-mandated idling of Vedanta Resources PLC's (VED.LN) copper smelter in India's Tamil Nadu region--the country's second-largest--after anti-pollution protests turned deadly, with nine killed.

Elsewhere in the base metals complex, aluminum prices gave only a muted reaction to the expiry of U.S. tariff exemptions on steel and aluminum imports from Canada, Mexico, and the European Union.

Even local U.S. premiums--which might normally be boosted by such an event--barely moved on Thursday.

"The increase was very very soft, and the market expects those premiums to settle down," said Oliver Nugent, a strategist at ING.

While Washington's decision to not renew exemptions on key allies and neighbors introduces further uncertainty into the market and increases trade tensions, "the impact of the tariffs is likely to be only modestly negative," said Goldman Sachs economists in a note.

Instead, aluminum traders were still focused on the potential for the lifting of sanctions on global number-two aluminum company United Co. Rusal (0486.HK). Markets were roiled earlier in the year by the Treasury Department's imposition of sanctions on Oleg Deripaska, the Russian billionaire who controls Rusal's holding company EN+ Group (ENPL.LN).

In recent statement, EN+ Group has displayed a willingness to reduce Deripaska's influence in order to appease the U.S.

"Most people are anticipating Rusal's sanctions getting lifted," said ING's Mr. Nugent.

Investors were continuing to focus on geopolitical headlines, any further news about Rusal's sanctions, and other supply-demand news in metals markets.

Among precious metals, silver was up 0.43% at $16.45 a troy ounce, platinum was up 0.47% at $910.75 a troy ounce and palladium was up 0.17% at $989.36 a troy ounce.

Among base metals zinc was down 0.44% at $3,086.50 a metric ton, nickel was down 0.82% at $15,165 a metric ton, tin was down 0.15% at $20,615 a metric ton and lead was down 0.67% at $2,442 a metric ton.

Write to David Hodari at [e-mail]

(END) Dow Jones Newswires

June 01, 2018 06:34 ET (10:34 GMT)

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