METALS-Copper hits three-week high on supply concerns, falling inventories

(Updates prices at 1700 GMT) By Eric Onstad LONDON, Dec 6 (Reuters) - Copper prices touched a three-week high on Friday, boosted by declines in Chinese inventories and concerns about supply of raw materials after a treatment charge deal was agreed. Three-month copper on the London Metal Exchange (LME) CMCU3 was up 0.5% at $9,122 per metric ton by 1700 GMT, having touched $9,178.50, the strongest since Nov. 15. U.S. Comex copper futures HGc2 rose 0.5% to $4.18 a lb. News on Thursday that Chilean miner Antofagasta and Jiangxi Copper agreed to significantly lower copper concentrate processing fees for 2025 highlighted concerns about sufficient availability of copper concentrate in the spot market. "For 2025, we'll probably see smelters struggle to make profits at the new TC/RCs (treatment and refining charges). Supply issues will start to bubble up in the second half of 2025," said Daria Efanova, head of research at broker Sucden Financial. Some investors were closing out positions ahead of the year-end and the rising copper price sparked some short-covering by speculators, Efanova added. Although copper has shed 10% since touching a four-month peak of $10,158 on Sept. 30, it has rebounded after sinking to $8,904 on Monday. The market has also been bolstered by a steady erosion of inventories on the Shanghai Futures Exchange (SHFE), which registered another 10% decline in weekly data on Friday, bringing the total fall since early June to 71%. CU-STX-SGH The most-traded January copper contract on SHFE SCFcv1 closed 0.2% higher at 74,730 yuan ($10,293.25) a ton and gained 1% for the week. Efanova said the copper market was also focused on the dollar, which has recently been weakening, making commodities priced in the U.S. currency less expensive for buyers using other currencies. The dollar index .DXY was slightly firmer on Friday following data that showed a rise in the unemployment rate, which should allow the Federal Reserve to cut interest rates again this month. Among other metals, LME aluminium CMAL3 shed 1.4% to $2,602 a ton, zinc CMZN3 fell 1.6% to $3,069, lead CMPB3 dropped 1.5% to $2,067.50, tin CMSN3 edged down 0.3% to $29,080, while nickel CMNI3 advanced 0.5% to $16,050. For the top stories in metals, click TOP/MTL (Reporting by Eric Onstad; Editing by Vijay Kishore, Alexander Smith, Krishna Chandra Eluri and Alan Barona) (([email protected]; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: [email protected])) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))