MUMBAI, June 6 (Reuters) - Indian copper futures rose on Friday as a weak dollar and fresh supply concerns in Chile extended support, analysts said.
“Copper has risen mainly on dollar today but the supply problems in Chile is also extending good support,” said an analyst from Motilal Oswal.
At 4.05 p.m., the benchmark June copper MCCM8 on the Multi Commodity Exchange of India (MCX) was up 1.59 percent at 340.80 rupees per kg.
The dollar slipped on Friday after European Central Bank President Jean-Claude Trichet warned of an impending rate rise.
A weakening dollar makes dollar-denominated commodities cheaper for holders of other currencies and boosts demand.
On the supply side, prices were supported after resources giant BHP Billiton (BHP.AX) BLT.L said operations at its smallest copper mine in Chile, Cerro Colorado had been hit by a truckers’ strike.
The weekly Shanghai inventories also helped strengthen sentiment on Friday, analysts said.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 13 percent in the week ended Thursday. Copper inventories fell to 38,829 tonnes from 44,554 tonnes the previous week.
Buying in June copper was recommended at 338 rupees with a stop loss of 336 rupees and a target of 342 rupees, said a technical analyst from Motilal Oswal.
The markets also awaited U.S. non-farm payrolls data for May, for further clues on the health of the U.S. economy and a possible dollar reaction.
Investors in industrial metals have been sensitive to moves in currency markets and news about the macroeconomic picture as a slowdown in major economies could mean less demand for metals.
Nickel futures rose on Friday on short-covering after prices fell more than 19 percent during the month of May and also on some fresh buying, analysts said.
Some fresh buying is seen because people are buying nickel instead of pig iron as nickel is now much cheaper, said the analyst from Motilal Oswal.
Pig iron is a lower level substitute of nickel.
At 4.05 p.m., the benchmark June nickel MNKM8 was up 0.91 percent at 994 rupees.
However, analysts expect the lack of demand for stainless steel to weigh on prices.
Lack of demand for stainless steel from China, is causing the stainless steel industry to cut down production. These companies use 70 percent of the total global offtake of nickel.
Zinc futures rose on Friday on Chinese arbitrage and short covering after falls in the previous session, analysts said.
At 4.05 p.m., the June zinc MZIM8 on the MCX was up 1.19 percent at 83.35 rupees a kg .
Weaker zinc prices in London have spurred Chinese speculators to buy zinc on the London Metal Exchnage (LME) and resell it in the Chinese markets, where prices are high.
Such trading, known as arbitrage, secures players profits by putting opposite bets on two exchanges as prices move and supports the metal.
Lead, on the other hand remained flat as support from a weak dollar is offset by rising inventories in exchanges monitored by the LME. Lead stocks rose 1,025 tonnes to 72,550 tonnes on Thursday.
The benchmark lead for June delivery MLDM8 on the MCX was remained unchanged at 84.15 rupees per kg from its previous close. (Reporting by Nandita Bose; Editing by Ramya Venugopal)