Most base metals decline on firmer dollar; supply outlook in focus

Adds comments, updates prices

BEIJING, May 8 (Reuters) –Prices of most base metals slipped on Wednesday, as a firmer US dollar made the greenback-priced commodity more expensive for buyers, while investors assessed the supply outlook for metals.

Three-month copper on the London Metal Exchange CMCU3 was down 1.5% at $9,881 per metric ton, as of 0719 GMT, reversing previous gains that pushed the contract to a nearly two-year high.

The most-traded June copper contract on the Shanghai Futures Exchange SCFcv1 was down 1.9% to 79,540 yuan ($11,008.39) a ton.

The dollar =USD was back on the front foot on Wednesdaymaking modest gains after earlier losses from renewed bets on Federal Reserve rate cuts this year.

A Chinese trader attributed the price downtrend to a broader risk-off sentiment, as equity market and futures including coking coal DJMcv1 and coke DCJcv1 all declined.

The supply outlook for metals was also on investors’ radar, as raw material shortages of copper have been a key driver behind the recent rally.

Mining giant Freeport-McMoRan FCX.N is preparing to ship as much as 900,000 tons of copper concentrate starting in June from its Grasberg mine after positive talks with Indonesia to extend its export licence, Reuters reported on Tuesday.

The increase could ease shortages in the market and therefore weigh down copper prices, a Chinese copper smelter said.

However, the overall copper concentrate supply deficit is here to stay in the next two years, which is likely to push Shanghai copper close to 100,000 yuan per ton, said CITIC Futures analysts in a note.

LME nickel CMNI3 fell 2.6% to $18,750 a ton, tin CMSN3 shed 2.1% to $31,900, aluminum CMAL3 slipped 1.5% to $2,532, lead CMPB3 moved 0.6% lower to $2,230, zinc CMZN3 lost 1.7% to 2,910.

SHFE zinc CMZN3 was down 0.9% at 23,120 yuan a ton, tin SSNcv1 slid 2.3% to 257,260 yuan, aluminum SAFcv1 fell 1.4% to 20,415 yuan, nickel SNICv1 lost 2.8% to 141,190 yuan, while leading SPBcv1 rose 1% at 17,870 yuan.

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($1 = 7.2254 Chinese yuan)

Reporting by Siyi Liu and Mei Mei Chu; Editing by Sherry Jacob-Phillips and Rashmi Aich

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