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Copper Falls as Russia-Ukraine Tensions Rise

LONDON, Feb 17 (Reuters) - Copper prices fell on Thursday, with wider markets in cautious mood as reports of artillery fire in east Ukraine heightened fears of conflict between Russia and Ukraine.

Stock markets edged lower, bond prices rose and the dollar strengthened slightly, making metals costlier for buyers outside the United States.

Benchmark copper on the London Metal Exchange (LME) was down 0.5% at $9,939.50 a tonne at 1141 GMT having earlier fallen as much as 1.7%.

Copper reached a record high of $10,747.50 a tonne in May but has since bumbled along between around $9,000 and $10,000 as the economy of China, the largest metals consumer, slowed.

Prices are still too high and will likely fall in the coming weeks or months as copper supply increases, said Commerzbank analyst Daniel Briesemann, adding that the decline would soon reverse.

"Demand prospects are excellent in the longer term," he said.

UKRAINE: Russian-backed rebels and Ukrainian forces traded accusations that each had fired across the ceasefire line in eastern Ukraine, raising alarm at a time when Western countries have warned of the possibility of a Russian invasion any day.

Russia is a major producer of aluminium and nickel.

CHINA: Demand in China has during Chinese New Year and the Olympics, when some industrial output has been restricted.

Yangshan copper import premiums fell to $38 a tonne from $140 in October last year and stockpiles in Shanghai Futures Exchange warehouses have risen to 106,572 tonnes from 40,359 tonnes in late January. ,

PBOC: Data on Wednesday showed China's factory-gate inflation and consumer price growth softened, potentially leaving more room for the People's Bank of China to ease policy to support the economy. 

TIN: China's refined tin production in January fell 3.4% from the previous month, researchers Antaike said. 

METALS PRICES: LME aluminium was up 0.1% at $3,260 a tonne, zinc rose 0.5% to $3,602, nickel climbed 0.7% to $23,560, lead fell 0.1% to $2,336 and tin was down 0.3% at $43,570.

Reporting by Peter Hobson Additional reporting by Eileen Soreng in Bengaluru Editing by David Goodman and David Evans

Source: Reuters

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