LONDON: Copper prices slipped and nickel touched its lowest in more than two months on Friday, pressured by a firm dollar and rising inventories that highlighted a supply surplus.
Three-month copper on the London Metal Exchange lost 0.7% to $9,731 a metric ton by 1015 GMT.
“In metals, risk appetite has faded recently, but that was necessary after a very strong move that was not justified at the time,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Copper has given up 12% since touching a record peak of $11,104.50 last month after a rally fuelled by speculators and investment funds.
“Buyers will be hesitant until we see a clear upside break through that $10,000 psychological level, which will be a hard nut to crack,” Hansen said.
A stronger dollar weighed on metals, making commodities priced in the U.S. currency more expensive for buyers using other currencies.
Copper inventories in LME-registered warehouses have gained 28% over the past month to the highest level in four months.
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That has been partly responsible for the LME cash contract’s discount to the three-month contract in a market structure known as contango. The discount was close to a record high on Tuesday at $133 a ton.
LME nickel, meanwhile, eased 0.8% to $17,505 a ton for its weakest since April 8 and down about 3% this week.
Shanghai Futures Exchange nickel stocks hovered around their highest since November 2020 while LME inventories climbed to 87,480 tons, their highest since February 2022.
The rising stockpiles were partly because Chinese producers have ramped up output of high-grade cathodes deliverable on the LME.
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