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Base metal prices on Friday edged down from near multi-year peaks after US President Donald Trump backed a stronger dollar, prompting the currency to trade above its recent lows. A stronger dollar makes metals more expensive for the holders of other currencies.
The greenback's recent weakness saw lead on the London Metal Exchange touch $2,653 a tonne on Thursday, highest since August 2011, while zinc hit a decade high of $3,481.50, and nickel its highest since May 2015. Trump's comments on the US currency contradicted US Treasury Secretary Steven Mnuchin's earlier endorsement of a weak dollar.
"As far as the metals are concerned it would seem that the mainly Mnuchin-inspired reason for the rally has been if not reversed certainly modified and as a result the ever-nervous markets lost and may yet lose further ground," Malcolm Freeman, CEO of Kingdom Futures, wrote in a note on Friday.
Three-month copper on the LME was flat at $7,139 a tonne at 0800 GMT, recovering from a 0.3 per cent dip earlier in the session. Copper is set for a weekly rise of 1.3 per cent. The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.2 per cent at 53,430 yuan ($8,448.77) a tonne.
"The previous day's bounce was too sudden. After the prices rose, there are not many people looking to buy high," says Xu Maili, director of non-ferrous metal research at Everbright Futures in Shanghai.
Copper inventories in warehouses monitored by the ShFE fell 6.8 per cent week-on-week, the exchange said on Friday, while aluminium stocks rose to another record high and ever-tight lead stocks shrank. Nickel was the sole gainer among base metals, nudging up 0.2 per cent in London, and climbing 1.1 per cent in Shanghai, where it has clocked a weekly gain of 7.8 per cent on positive demand prospects in China.
Freeport-McMoRan Inc said it was edging closer to a permit deal with Indonesia for its massive Grasberg mine, but the world's second-biggest copper producer cautioned that it has not yet struck any formal agreements.
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