May 3, 2017 / 5:43 AM / 4 months ago

METALS-London copper falls as dollar firms on rate rise potential

 (Adds Philippine nickel detail, updates prices)
    By Melanie Burton
    MELBOURNE, May 3 (Reuters) - London copper dropped on
Wednesday from a three-week high hit the session before as the
dollar ticked higher on expectations the Federal Reserve will
signal a June rate rise later in the session. 
    Nickel prices also fell after Philippine lawmakers rejected
the appointment of Regina Lopez as Environment Secretary,
potentially paving the way to ease a crackdown on the country's
mines. Philippines is a major exporter of nickel laterite ore. 

    Lopez had angered the mining sector after ordering in
February the closure of more than half the country's mines and
the cancellation of dozens of contracts for undeveloped mines to
protect water resources. Last week, she banned open-pit mining. 
    
    FUNDAMENTALS
    * LME COPPER: London Metal Exchange copper fell by
1.7 percent to $5,702.50 a tonne by 0750 GMT, erasing 1.2
percent gains from the previous session when prices topped out
at $5,820 a tonne, the highest in three weeks, and closed at the
100-day moving average. 
    * LME nickel slid 1.7 percent. 
    * TECHNICALS: Traders said prices were consolidating having
failed to convincingly push upside beyond resistance at the
$5,820-$5,840 level.
    * SHFE COPPER: Shanghai Futures Exchange copper
slipped by 0.6 percent to 46,580 yuan ($6,757) a tonne.
    * OTHER METALS: LME zinc and lead fell
around 2 percent on the LME and almost 2 percent in Shanghai,
tracking a drop in steel.
    * ZINC PREMIUMS: But premiums for zinc held in China bonded
zones started to rise last week to $120-130 from $105-115, the
strongest since February as long standing shortfall in mine
supply begins to impact the refined market. ZN-BMPBW-SHMET 
    * HOLIDAYS: Japan was on its Golden Week holiday, draining
liquidity from the market while it was also a public holiday in
South Korea. 
    * CHINA FOREX: Moves to control capital outflows and
concerns over a potential further depreciation of the yuan are
likely to impede the internationalisation of Chinese currency,
Fitch credit rating agency said.
    * METALS POLL: Aluminium's global surplus will fall sharply
this year due to an environmental crackdown in top producer
China and move to a deficit in 2018, although the market has
largely priced in the impact, a Reuters poll showed.

    * NICKEL: Indonesia's state-controlled miner PT Aneka
Tambang (Antam) will resume exports of nickel ore this
month, with an initial shipment of 150,000 tonnes expected to
leave for China in early May.                
    * MARKETS: Asian stocks were mixed on Wednesday, moderating
after earlier strong gains on positive global earnings and
manufacturing data, while expectations that the Federal Reserve
will signal a June rate increase later in the session lifted the
dollar.
    * COMING UP: Euro zone GDP flash Q1 at 0900 GMT, Federal
Reserve statement.
 BASE METALS PRICES                 0750 GMT          
 Three month LME copper                           5699
 Most active ShFE copper                         46550
 Three month LME aluminium                        1915
 Most active ShFE aluminium                      13960
 Three month LME zinc                             2608
 Most active ShFE zinc                           21890
 Three month LME lead                             2192
 Most active ShFE lead                           16230
 Three month LME nickel                           9350
 Most active ShFE nickel                         79370
 Three month LME tin                             19905
 Most active ShFE tin                           142950
                                                      
 BASE METALS ARBITRAGE                                
 LME/SHFE COPPER              LMESHFCUc3         686.5
 LME/SHFE ALUMINIUM           LMESHFALc3      -1327.53
 LME/SHFE ZINC                LMESHFZNc3        298.47
 LME/SHFE LEAD                LMESHFPBc3      -1917.98
 LME/SHFE NICKEL              LMESHFNIc3       2820.74
    
    ($1 = 6.8934 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Sunil Nair and
Subhranshu Sahu)
  
 
 

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