March 17, 2017 / 7:28 AM / 10 months ago

METALS-London copper set for biggest weekly gain in five as dollar drops

* Goldman Sachs expects copper market to tighten “imminently”

* Reiterates call for $6,200 copper in three months

* Coming up: U.S. industrial production for Feb at 1315 GMT (Adds detail; updates prices)

By Melanie Burton

MELBOURNE, March 17 (Reuters) - London copper slipped on Friday, but remained on course to mark its biggest weekly advance since mid-February on a weaker dollar and ongoing mine supply concerns.

The dollar held around a five-week low against a basket of currencies after the U.S. Federal Reserve on Wednesday signalled a slower pace of monetary tightening. A softer dollar boosts the buying power of those paying for commodities in other currencies.

“Base metals were broadly ... supported by the weaker USD and positive fundamentals. Supply side issues continue to support copper prices,” ANZ said in a report.

Three-month copper on the London Metal Exchange slipped 0.5 percent to $5,882 a tonne by 0704 GMT, following a 0.7-percent gain in the previous session.

Price on Thursday reached $5,948.50, the strongest since March 6 and was set for a gain of around 3 percent for the week.

Shanghai Futures Exchange copper edged down 0.5 percent to 47,740 yuan ($6,916) a tonne.

Striking workers at BHP Billiton’s Escondida copper mine in Chile are blocking attempts by the company to renew operations at a key port nearby as the stoppage enters its sixth week.

Union members said they would return to the negotiating table if the company gave a written guarantee that it would only discuss the union’s three key demands.

Goldman Sachs said fees to China copper were falling close to break-even costs of $50-$60 a tonne, at $60-$70 a tonne.

“Should (treatment charges) fall substantially below this level in the coming weeks, we expect this will be an important catalyst for physical tightening and for the next leg higher in copper prices,” it said.

But so far, the shortfall has not eroded Asian stocks, a trader said.

“I have heard concentrates are getting tighter, which obviously makes sense but no tightness has fed through to the refined market whatsoever,” he said.

“The best bids in Asia are the warehouses. Seems the end users in China were well stocked before Chinese New Year and have no appetite to buy more at these high LME numbers.”

LME zinc targeted a 5-percent rally this week. Price have been supported by a widening shortfall in metal after several large mines closed.

Russian aluminium giant Rusal forecast the market to remain in good shape this year.

ANZ is scaling back its commodities market exposure by quitting trading activity in base metals, coal and iron ore and electricity, the bank confirmed.

A Philippine nickel ore producer plans to reopen two mines suspended for environmental violations while it awaits the outcome of an appeal, in a test of rules around the government’s industry crackdown.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.8950 Chinese yuan) ($1 = 6.9026 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Subhranshu Sahu and Joseph Radford)

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