METALS-Copper off 14-month top as dollar edges up

Posted by tjdetai on July 27th, 2015

Aluminum Pipe

MARKETS-METALS (UPDATE 5):METALS-Copper off 14-month top as dollar edges up* Copper stocks keep rising, aluminium stocks near record* Dubai's move to restructure debt knocks risk appetiteLONDON, Nov 26 (Reuters) - Copper fell from 14-month highs as the dollar edged off multi-months lows and stocks of the red metal and aluminium remained near record levels.Benchmark copper on the London Metal Exchange traded at ,891 a tonne at 1514 GMT from a close of ,985 on Wednesday. The metal used in power and construction fell from a session high of ,060, its highest since September last year.Global stock markets fell after Dubai asked creditors of two of its flagship firms for a standstill on debt worth billions of dollars as part of restructuring Dubai World, the conglomerate that spearheaded the emirate's growth.Dubai's shock move dented risk appetite across asset markets to the benefit of the dollar, which edged up from a 14-year low against the yen. A stronger U.S. currency makes dollar-priced commodities costlier for holders of other currencies."We're bullish on copper but we're looking for a pullback in the next few months," said Standard Chartered ( SCBEF.PK - news - people ) analyst Daniel Smith in London."We're looking for the dollar to regains some strength early next year," he said, adding that metals prices had run ahead of real fundamentals.Sentiment was also dented by rising inventory levels. Latest data showed copper stocks at LME warehouses jumped 475 tonnes to 432,075 tonnes, their highest since April."We continue to see inventory growth implying that prices are increasingly supported by investment demand, and less by supply demand fundamentals," said Fairfax analysts in a note."However, the new year should see increased global industrial activity that should help to redress this balance, although whilst inventories remain high there is the possibility of a sharp correction."Trading was thinner than usual with U.S. markets closed on Thursday for the Thanksgiving Holiday. SUPPLY THREATS EASEAlso pressuring prices, threats to supply have eased after workers at Antamina, a major copper pit in Peru, said they had wrapped up negotiations for a labour agreement.Stoking concerns about fundamentals, copper purchases by China is starting to cool and OECD demand is still languishing.Buying by China, the world's top copper consumer, has helped the metal price rise some 125 percent so far this year. Interest from funds remains strong and is bolstering copper prices.Stainless steel ingredient nickel traded at ,780 a tonne from ,000, with LME stocks up 390 tonnes to 133,446, a level not seen since early 1995."We've seen a slowdown in Chinese import demand and some slowdown in the Chinese stainless steel sector ... but that's a temporary move given current expectations for increased stainless steel production in 2010," said Barclays ( BCS - news - people ) Capital analyst Nicholas Snowdon.Aluminium, used in transport and packaging, traded at ,022 a tonne versus ,047.LME stocks rose 8,075 tonnes to 4.603 million tonnes, back near record levels of 4.629 million tonnes seen in September.

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