LONDON: Copper prices steadied on Wednesday near a one-month low, after hefty falls in the previous session, as the dollar's surge against a basket of currencies stabilised, while nickel slipped as supply worries eased.
Three-month copper on the London Metal Exchange (LME) was at $6,841 a tonne at 1019 GMT, almost flat from the previous close, after falling more than 2 percent to a near one-month low of $6,821.75 a tonne on Tuesday, due to pressure from a strong dollar.
Global shares tumbled on Wednesday as markets strengthened bets on an early U.S. rate hike, while persistent concerns over Scotland's future unnerved investors in Europe, helping a high-flying dollar hold on to recent gains.
The dollar was 0.1 percent lower against a basket of currencies, but remained near 14-month highs. A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.
"Clearly the market was taken aback by the severity of the move yesterday afternoon, that was quite a sharp move and the fear is that there are some unpleasant economic data releases going to be coming out of China over the next few days," said Nic Brown, head of commodities research at Natixis.
Reflecting worries over China's pullback in growth, Premier Li Keqiang said on Monday China cannot rely on loose credit to lift its economy, adding that the country may find it difficult to avoid short-term fluctuations in growth.
NICKEL WEAKNESS PERSISTS
Benchmark nickel fell 1.5 percent after shedding over 5 percent on Tuesday after worries faded about a squeeze on supply from the Philippines.
The metal hit its highest since July 3 at $19,940 on Monday, after a Philippine Congressional committee approved a bill seeking a halt to exports of unprocessed mineral ores.
But the proponent of the bill said in an interview with Reuters on Tuesday that a proposed ban may not be implemented for about seven years.
The Philippines is now the top supplier of nickel ore for China's stainless steel industry following an Indonesian ore export ban from January.
"Our own thoughts were that ... you have a situation in which the nickel market is currently in surplus. But ... you would fully expect there to be a growing deficit later this year and going into 2015 due to the natural seasonality of Philippine output," Brown said.
"So when you get a seasonal low in Philippine output later this year and early next year combined with a lack of any exports coming out of Indonesia, you could see quite a sharp deficit emerging in the nickel market there."
In industry news, Myanmar has invited expressions of interest from private sector companies to jointly set up tin smelting and refining plants, the country's Ministry of Mines said on Wednesday.
