* Speculation of March rate rise drives dollar higher
* LME aluminium at risk of near term correction -JP Morgan
* Coming Up: U.S. Markit Mnfg Flash PMI Feb at 1445 GMT
(Adds closing prices)
By Maytaal Angel
LONDON, Feb 21 Copper prices slipped on Tuesday
due to a rise in the dollar and as investors locked in gains
after a rally to above $6,000 a tonne, driven by the prospect of
major supply disruptions in Chile and Indonesia.
The dollar was on course for its steepest gain against the
euro in more than a month following hawkish comments from
Federal Reserve officials, while European political uncertainty
also boosted the greenback.
A stronger dollar erodes the buying power for those paying
for dollar-denominated commodities with other currencies.
Three-month copper on the London Metal Exchange
slipped 0.2 percent to close at $6,060 a tonne, after rising 1.9
percent on Monday. Copper hit its highest level in 1-1/2 years
earlier this month on the prospect of disrupted supply.
"The market has priced in a lot of the disruptions and is
vulnerable to corrections. All these (supply) events have
attracted speculative interest and as soon as they die down so
will that interest," said Warren Patterson, commodities
strategist at ING.
In Chile a government-mediated meeting between BHP Billiton
and striking workers at its Escondida copper
mine has failed without any future talks planned.
Meanwhile U.S. mining giant Freeport-McMoRan has
warned 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
In demand side news, China's central bank said on Tuesday it
would extend a preferential scheme for some banks that would
free up additional funds for lending, as long as the banks
channel money to weaker sectors of the economy.
China accounts for nearly half of global copper demand.
Aluminium ended down 0.7 percent at $1,886.
There are supply concerns in aluminium, where a major
producer offered a $125 per tonne premium to Japanese buyers for
April-June shipments, up 32 percent from the last quarter.
Still, aluminium is at risk of a correction lower, JP Morgan
said in a note.
"Chinese inventories of aluminium look set to continue to
increase over the coming weeks."
Nickel closed down 2.7 percent at $10,855, having
hit its highest since Dec. 19 on Monday amid a mining crackdown
in the Philippines.
The worldwide nickel market registered a deficit of 49,700
tonnes which compared with a surplus of 91,400 tonnes in 2015,
industry data showed.
Zinc ended down 0.3 percent at $2,875, lead ended
down 2 percent at $2,265, while tin closed down 0.5
percent at $19,800.
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)
(Additional reporting by Melanie Burton; Editing by Greg
Mahlich and Susan Thomas)