Metals: Copper Picks Up as Traders Eye Supply
June 01 2018 - 6:49AM
Dow Jones News
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 David.Hodari@wsj.com
(END) Dow Jones Newswires
June 01, 2018 06:34 ET (10:34 GMT)
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