Strengthening dollar sucks momentum from copper's rally
The dollar touched its strongest since July
Copper prices fell on Wednesday as the dollar strengthened and the slowing pace of the metal's rally raised fears of a speculative sell-off.
The dollar touched its strongest since July, making metals pricier for buyers with other currencies.
Benchmark three-month copper on the London Metal Exchange (LME) was down 1.1% at $6,702 a tonne at 1117 GMT.
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Prices of the metal used in power and construction have rallied more than 50% since March as industry recovered from coronavirus closures and speculators piled into the market.
The rising dollar, signs of slowing demand in China and a loss of momentum could encourage speculators to sell positions, knocking prices lower, said Saxo Bank strategist Ole Hansen.
A fall below $6,600 would be a powerful bearish signal, he said.
"It's potentially time to sound a little bit of an alarm bell."
Factories: Euro zone manufacturing expanded faster than expected in September, but services disappointed. Japan's factory activity extended declines.
Lme Supply: A rising premium for cash copper versus the three month contract pointed to tightening nearby supply. On-warrant inventories in LME-registered warehouses are below 30,000 tonnes, from 250,000 tonnes in May. <MCU0-3> <MCUSTX-TOTAL>
China: However in China, the biggest consumer, Yangshan import premiums have halved to $55 since May and inventories in Shanghai Futures Exchange warehouses are at 193,347 tonnes from 99,971 tonnes in June. <CU-STX-SGH> <SMM-CUR-BON>
Glencore: Glencore said it would extend the life of a copper smelter and refinery in Australia, and that its Democratic Republic of Congo subsidiary Kamoto Copper Company should produce 270,000 tonnes of copper cathode in 2020.
Lead/Zinc: Oversupply of lead and zinc increased in July, data from the International Lead and Zinc Study Group (ILZSG) showed.
Aluminium: China's August imports of aluminium surged eight-fold from a year earlier as traders took advantage of lower overseas prices.
Other Metals: LME aluminium was 1% lower at $1,759.50 a tonne, zinc fell 0.9% to $2,443, nickel slipped 0.7% to $14,500, lead lost 0.6% to $1,872.50 and tin was down 0.9% at $18,085.
