METALS-Copper prices recover on supply concerns, strong dollar limits gains

Credit: REUTERS/SIYI LIU

By Polina Devitt

LONDON, Dec 6 (Reuters) - Copper prices rose in London on Wednesday after two sessions of falls due to concerns about the availability of copper concentrate, though a stronger dollar put a cap on gains.

Three-month copper on the London Metal Exchange CMCU3 rose 0.6% to $8,386 per metric ton by 1201 GMT.

Last week's agreement between global miners and Chinese smelters for a lower 2024 copper concentrate treatment and refining charges - the first drop in three years - remained in the market focus.

"We see this news as indicating higher copper prices to come as smelters struggle to secure sufficient copper concentrates restricting their output," SP Angel analyst John Meyer. China is the world's top metals consumer.

Copper, used in power and construction, touched a 4-month high of $8,640 a ton on Dec. 1 amid concerns about tighter supply from Panama and then fell to a two-week low of $8,313 on Tuesday as Moody's issued a downgrade warning on China's credit rating.

"Fortunately, the market is looking forward with much of the world showing surprisingly strong economic growth," Meyer said.

The U.S. economy grew at a searing annual pace of 5.2% in the third quarter, the highest since it emerged from the COVID-19 pandemic in the fourth quarter of 2021.

The dollar index held near a two-week high on Wednesday, making dollar-priced commodities more expensive for buyers using other currencies.

On the technical front, copper is hemmed in by the 200-day moving average at $8,434 and the 21-day moving average at $8,336.

LME aluminium CMAL3 was down 0.2% to $2,156.6 a ton, nickel CMNI3 climbed 2.2% to $16,490 while tin CMSN3 jumped 1.8% to $24,415.

Lead CMPB3 fell 0.5% to $2,042 after touching the lowest since June 8 of $2,024 amid growth of the daily stocks in the LME-registered warehouses MPBSTX-TOTAL.

Zinc CMZN3 rose 1.3% to $2,452. Zinc stocks continue to decline after sharp November growth with daily LME data showing net fresh cancellations of warrants at 21,225 tons MZNSTX-TOTAL, 0#MZNSTX-LOC-GRD.

(Reporting by Polina Devitt in London; additional reporting by Mai Nguyen in Hanoi; editing by Emelia Sithole-Matarise)

((polina.devitt@thomsonreuters.com; Reuters Messaging: polina.devitt.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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