* LME aluminium at risk of near term correction -JP Morgan
* Coming Up: Germany Markit Mnfg Flash PMI Feb at 0830 GMT
(Adds comment, detail, updates prices)
By Melanie Burton
MELBOURNE, Feb 21 London copper slipped on
Tuesday as the dollar pushed ahead, but ongoing supply concerns
from industrial action in Chile and an Indonesian export permit
dispute underpinned prices.
The dollar climbed as the euro nursed losses, with concerns
about the looming French election rattling European bonds. A
stronger greenback erodes buying power for those paying for
dollar-denominated commodities with other currencies.
"Yesterday's impressive base metal rally has so far stalled
into the ShFE session as light regional long liquidation weighs
on prices all be it on low volumes," said Marex Spectron in a
"The move higher yesterday was no doubt exacerbated by the
absence of some key U.S. accounts that have recently been on the
offer and ahead of the resumption of 'normal' trade some
retracement should be expected," it said.
U.S. markets were closed on Monday for a public holiday.
Three-month copper on the London Metal Exchange
slipped by 0.5 percent to $6,036.50 a tonne by 0720 GMT, paring
gains after a 1.9 percent rally in the previous session. LME
copper struck $6,105 a tonne on Monday, strongest since Feb. 14.
Shanghai Futures Exchange copper pulled back from
early gains on Tuesday to finish up 1 percent at 48,920 yuan
($7,108) a tonne.
Other metals were also buoyed by supply concerns, with
Shanghai zinc leading sister metal lead up
around 2 percent, following gains in London overnight after a
steep fall in available zinc inventory on the LME and concerns
over mine supply.
A government-mediated meeting between BHP Billiton
and striking workers at its Escondida copper mine in
Chile has failed, and workers will head back to their encampment
without any future dialogue planned, a union spokesman said.
U.S. mining giant Freeport-McMoRan Inc warned on
Monday it could take the Indonesian government to arbitration
and seek damages over a contractual dispute that has halted
operations at the world's second-biggest copper
There are also broad supply concerns in aluminium markets,
and a major producer has made an indicative offer of a premium
of $125 per tonne to Japanese buyers for April-June primary
metal shipments, up 32 percent from the last quarter, three
sources involved in pricing talks said on Monday.
Still, LME aluminium prices are at risk of a
correction lower as surplus Chinese production flows into
warehouses and drags on global prices, JP Morgan said in a
The bank said it sees "the potential for environmentally
driven Chinese smelting capacity closures to skew aluminium
price risk higher in the medium term ... (and) look to
re-initiate length at better prices in the coming weeks."
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
($1 = 6.8826 Chinese yuan)
(Reporting by Melanie Burton; Editing by Richard Pullin and Tom