October 10, 2013 / 10:17 AM / 6 years ago

METALS-Copper rises on U.S. impasse optimism, dollar checks gains

* Computer glitch, shutdown inflate U.S. jobless claims

* Cerro Matoso ferronickel mine halted (Updates with closing prices)

By Freya Berry

LONDON, Oct 10 (Reuters) - Copper rose on Thursday, following equities higher on signs of progress in the U.S. budget and debt-limit standoff, but a stronger dollar kept gains in check.

The possibility of an end to the U.S. government shutdown, now in its 10th day, and an agreement to raise the debt ceiling lifted global stock markets and the dollar.

Benchmark three-month copper ended at $7,145 from a close of $7,100 on Thursday.

A stronger U.S. currency makes it more expensive for foreign investors to purchase dollar-priced commodities, thus pressuring prices lower.

“We have quite strong upside momentum in European equities this morning, so it seems like today there is more risk appetite across equities and commodities,” said Myrto Sokou, commodities analyst at Sucden.

U.S. jobless data jot a six-month high last week, partly due to a computer glitch in California, but the underlying trend still pointed to a steadily improving labour market.

The figures were also inflated by the U.S. government shutdown which has left hundreds of thousands of people out of work.

The lack of direction has seen prices wobbling throughout the day, which Societe Generale analyst Robin Bhar put down to shorting by investors seeking to eke out returns.

“Sell the highs in the morning, then buy back at the lows in the afternoon towards the close - I suspect that’s going to be a daily pattern whilst we have this limbo,” he said.


Benchmark nickel closed at $13,750 a tonne, up from a close of $13,660 on Thursday, helped by the temporary closure of Colombia’s Cerro Matoso mine, the world’s second-biggest ferronickel producer after two weeks of protests by local groups demanding compensation for alleged harm to their health from pollution.

The closure to the mine, a property of BHP Billiton,

will halt 4 percent of world output, though the impact is likely to be short-lived because of a global nickel surplus that has sent prices tumbling almost 20 percent this year.

Finnish nickel miner Talvivaara, meanwhile, is seeking more funding to keep its mine open.

Aluminium was at $1,882 from $1,858, zinc ended at $1,895 from $1,886, lead closed flat at $2,075 and tin was also flat at $23,400. (Additional reporting by Melanie Burton in Singapore, editing by William Hardy and David Evans)

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