METALS-LME copper eyes worst week in 13 months on firm dollar, China sale plan
(Updates prices, adds quotes)
HANOI, June 18 (Reuters) – London copper prices on Friday were set for their worst weekly fall since March 2020 as China planned to sell its reserves of the metal and the dollar firmed on the prospect of U.S. interest rate hikes.
Three-month copper on the London Metal Exchange fell 0.6% to $9,258 a tonne by 0551 GMT, deepening its losses for the week to 7.5% and putting it on track for its worst weekly fall since March last year when the coronavirus destroyed demand.
The most-traded July copper contract on the Shanghai Futures Exchange dropped as much as 2.9% to 67,110 yuan ($10,408.85) a tonne, its lowest since April 15 and also set for a weekly drop.
The dollar was headed for its best week in nearly nine months as investors have scrambled to price in a sooner-than-expected ending to extraordinary U.S. monetary stimulus in the days after a surprise shift in tone from the Federal Reserve.
A stronger dollar makes greenback-priced metals more expensive and less appealing to holders of other currencies.
“Metals were suffering from equity markets that started to fall and tapering and potential rises in interest rates unnerving investors,” said Malcolm Freeman, a director at UK broker Kingdom Futures.
“It felt like the investment community was reducing its exposure.”
Earlier this week, top metals consumer China announced a plan to sell state reserves of copper, aluminium and zinc, in an effort to curb a strong price rally in commodities.
FUNDAMENTALS
* LME aluminium fell 0.3% to $2,392.50 a tonne, while nickel rose 1.1% to $17,360 a tonne. ShFE aluminium dropped 1.6% to 18,425 yuan a tonne, zinc shed 2.7% to 22,040 yuan a tonne and lead declined 1% to 15,160 yuan a tonne.
* LME copper inventories MCUSTX-TOTAL rose to their highest since April 28 at 143,750 tonnes.
* A party controls 50%-80% of available zinc stocks and short-term futures, LME data showed. <0#LME-WHT>
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