FCX Freeport McMoRan Inc

By David Hodari 

The price of copper slipped Thursday, surrendering its overnight gains as supply-side problems in Indonesia appeared to be close to ending.

Copper prices fell 0.66% to $5,866.00 a metric ton in midmorning London trading.

Gold also traded lower, by 0.20% to $1,249.90 a troy ounce, continuing to come off its political risk-driven gains seen earlier in the week.

Early-day reports indicated that Freeport-McMoRan Inc. and the Indonesian government had reached the final stage in negotiations that could allow the miner to resume copper exports.

Indonesia's Energy and Mineral Resources minister, Ignasius Jonan, said Thursday that Freeport had in principle agreed to new goverment-stipulated regulations, according to Commerzbank's morning note.

The reported agreement would see Freeport convert its pre-existing contract into a special mining license, Marex Spectron's Alastair Munro said.

"The developments at Grasberg might well have had an impact" on copper's price, Julius Baer's Carsten Menke said. A resumption of exports from Grasberg, coupled with the end of industrial action at BHP Billiton's Chilean Escondida mine, would add to global supply in a market which is already seeing "no signs of tightness," he added.

While the strikes at Escondida are over for now, the 44-day action may deliver a 250,000-metric-ton hit to the mine's expected output for the year, according to Investec analyst Gustavo Lagos. Prior to the strike, BHP Billiton had been guiding for annual production of just over 1 million metric tons.

Copper investors were looking for any clues as to President Trump's tax plan, ahead of his meeting with the National Economic Council--expected Thursday-- according to Marex Spectron's Dee Perera.

Aside from that, Chinese manufacturing purchasing managers index data, quarter-end trading, and movements ahead of the Chinese Qing Ming holiday weekend were all in traders' sights heading into Friday.

Gold's price recovery was stymied by a stronger dollar and the European Central Bank's clarification that its last Governing Council meeting had not been intended to signal a move to tighter monetary policy, according to Commerzbank. The WSJ Dollar Index, which measures the dollar against a basket of currencies, was recently up 0.11 to 90.17. A stronger dollar makes the metals more expensive for holders of other currencies.

The revelation that global physical gold demand dropped 18% in 2016--according to data released Thursday by research body GFMS--may also have dragged on the precious metal.

Among base metals, aluminum was flat at $1,955.00 a metric ton, lead fell 0.77% to $2,325.00 a metric ton, and zinc was down 0.58% at $2,842.50 a metric ton, tin fell 0.75% to $19,950.00 a metric ton and nickel dropped 0.40% to $9,985.00 a metric ton.

Among precious metals, silver fell 0.55% to $18.15 a troy ounce, platinum rose 0.36% to $956.50 a troy ounce and palladium was down 0.19% at $791.00 a troy ounce.

Write to David Hodari at david.hodari@wsj.com

(END) Dow Jones Newswires

March 30, 2017 06:33 ET (10:33 GMT)

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