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Copper Falls on China, Coffee & Nickel Up on Supply

March 1, 2014 at 2:43 by Vladimir Vyun

Copper closed lower on Friday due to concerns that economic growth in China, the biggest consumer of the metal in the world, is slowing. Analysts predicted that China’s manufacturing Purchasing Managers’ Index would fall from 50.5 in January to 50.2 in February, dangerously close to the neutral level of 50.0. The report was released after the session had closed and predictions turned out to be completely right. Contract for delivery of copper in three months declined $15 (0.21 percent) to close at 7,010 per metric ton on LME.

Meanwhile, nickel capped the biggest monthly gain in more than a year on concerns about supply from Indonesia. The country has banned export of unprocessed ore on January 12. Nickel for delivery in three months jumped as much as 1.9 percent to settle at $14,720 per ton on LME. The metal has advanced 5.3 percent in February, the biggest gain since January 2013.

Concerns about supply helped to lift prices for coffee too. Brazil, the biggest coffee producer and exporter, is suffering from the worst drought since 1972. Analysts have not yet been able to estimate damage to crops, but it is already clear that the harvest will be negatively affected. May futures for delivery of Arabica coffee advanced $0.010 (0.56 percent) to the settlement of $1.803 per pound on ICE.

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