London copper was set to rack up its third weekly loss in a row on Friday on expectations of a summer slowdown, while nickel was due to log the biggest climb among base metals as traders bet on dwindling ore stocks.

China’s initiative to resurrect trade along the ancient Silk Road connecting the Asia Pacific and Eurasian regions presents upside risk to demand for commodities from 2017, said Joel Crane of Morgan Stanley in Melbourne.

“(But) the dollar is rising, demand is seasonally slower, so there are some headwinds to prices in the coming months,’’ he said. Morgan Stanley forecasts copper averaging $5,952 a tonne in the third quarter.

LME copper

Three-month copper on the London Metal Exchange had edged up 0.1 percent to $5,923 a tonne by 0335 GMT, after the previous session’s 1.6-per cent loss, when prices slid to their weakest since April 23 at $5,906. Prices were on track for a 1.5-per cent weekly fall in a worsening chart picture.

The most-traded August copper contract on the Shanghai Futures Exchange dropped 1.4 per cent to 42,900 yuan ($6,911) a tonne. Support was seen at the 100-day moving average at 42,744 yuan, a break of which could spark momentum sales.

LME nickel

Across other metals, LME nickel was set to close the week up 2.5 per cent on expectations that China would turn to refined nickel as its ore stockpiles drop.

“Firmer-than-expected NPI production and weak nickel demand have delayed the market’s shift into deficit,’’ said BNP Paribas in a note. Nickel pig iron (NPI) is a cheaper source of feed than nickel, used by China’s vast stainless steel sector.

“We still expect a large deficit in 2016, but it will take longer to run down excess inventories.’’

The bank issued a trading recommendation to retain existing long positions on a risk-reward basis, but said there was no hurry to initiate fresh longs.

US non-farm productivity fell more sharply than initially thought in the first quarter, leading to a jump in labour-related production costs, a trend that could ignite inflation if sustained.

A deluge of Chinese data due next week may show some signs of steadying in the world's second-largest economy thanks to stimulus measures, but analysts say more support is needed to counter headwinds from a property downturn and patchy exports.

Mining equipment maker Joy Global Inc reported a quarterly profit that nearly halved as customers cut spending due to weak prices.

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