Copper falls due to the banking crisis in the United States and the rise of the dollar

By Eric Onstad

LONDON, March 14 (Reuters) – Copper prices fell on Tuesday on fallout from the U.S. banking crisis, a stronger dollar and a slow recovery in demand in China, the metals’ biggest consumer.

* Three-month copper on the London Metal Exchange (LME) fell 0.6% to $8,878.50 a tonne at 11:30 GMT, after rising 0.7% on Monday.

* Copper on the LME has fallen 7% since hitting a seven-month high of $9,550.50 a tonne in January, mainly on concerns over demand in China and rising interest rates global.

* “The dominant factor today continues to be headlines about US banks, which have generated broad risk aversion across all markets. Contagion to metals is limited for now, but we are monitoring these developments closely,” said Amelia Xiao Fu, Head of Commodity Markets Strategy at Bank of China International.

* Global equities fell along with oil and other risky assets, weighed down by lingering concerns over the implications of three US banks failing in less than a week.

* The strength of the dollar index also weighed on the metals market, making commodities denominated in US dollars more expensive for buyers using other currencies.

* The copper contract for April delivery on the Shanghai Futures Exchange fell 0.6% to 68,550 yuan ($9,974.83) a tonne.

* The Yangshan copper premium rose to $25 a ton on Monday, its highest level since March 1, signaling improved demand for imported copper in China, although still well below the $150 a ton premium ton reached last October.

* Among other industrial metals, aluminum on the LME fell 0.4% to $2,324.50 a tonne; zinc rose 0.1% to $2,948; the lead was little changed at $2,081.50; tin fell 2.3% to $22,675; and nickel rose 2.3% to $23,655 a tonne.

* To view base metal futures prices:

– COPPER

– LEAD

– TIN

– NICKEL

– ALUMINUM

– ZINC

(1 dollar = 6.8723 yuan)

(Reporting by Eric Onstad, additional reporting by Mai Nguyen in Hanoi; Editing in Spanish by Ricardo Figueroa)