Base metals lose ground on US dollar strength

Base metals prices closed mainly lower on Tuesday, impacted by a strengthening US dollar.

Aluminum, copper, zinc, lead and nickel all lost ground in London after recent gains.

"Prices were weaker today as the upside momentum eased and the stronger US dollar weighs on the market," brokerage Sucden Financial was quoted as saying by Dow Jones.

COPPER, ALUMINUM

Copper closed at US$3.228/lb, down almost three-quarters of a cent from the previous day, compared to a five-month high of US$3.258/lb on Friday (Jul 25). The red metal has risen in recent weeks on signs of strong economic growth in the US and China.

Aluminum fell by US$13.50 to US$1,974/t, its lowest price since July 18 and down from a 17-month high of US$2,020.50/t on July 22. Supply concerns and lower stockpiles are behind the metal's recent strength but higher prices could spur producers to bring suspended operations back into production, INTL FC Stone analyst Edward Meir said previously.

ZINC, LEAD

Zinc fell US$17 to US$2,388/t, down from a 35-month high of US$2,420/t on July 25. Prices have been buoyed by concerns over supply.

"We are seeing a technical reaction to recent gains, with some profit taking in a thin market," Michael Turek, a senior director at Newedge, was quoted as saying by Bloomberg. Lead ended US$4 lower at US$2,265/t.

NICKEL, TIN, MOLYBDENUM

Nickel declined US$275 to US$18,525/t, its lowest since July 18. Prices of the metal have increased this year, partly due to restrictions on unprocessed ore exports in Indonesia.

"While we expect prices to remain well supported, we continue to forecast prices broadly between US$18,000/t and $19,000/t for the rest of the year," Standard Bank said in note.

Tin was the only main base metal to improve, ending up US$50 at US$22,600/t, with molybdenum flat at US$29,500/t.