Copper rises on supply woes but dollar drives weekly fall

By Solomon Cefai

SINGAPORE, Oct 2 (Reuters) - Copper came off the previous day's lows on Friday, supported by supply concerns, but was on course to notch its worst weekly fall since late April.

Benchmark three-month copper on the London Metal Exchange was up 0.58% at $14,326.5 a metric ton by 0720 GMT. That marked a decline of 2.02% since the end of last week.

Official data on Wednesday showed that copper output in Chile, the world's largest producer of the red metal, fell 12.8% year-on-year in August.

Supervisors at Chile's Escondida copper mine, the world's largest, rejected a collective contract offer, paving the way for a potential strike and adding to supply fears.

"This adds to an overall slump in output, as the industry struggles to maintain aging infrastructure amid difficult operating conditions," Daniel Hynes, senior commodity strategist at ANZ, said in a note.

Inventories are thin in China, where stocks in warehouses monitored by the Shanghai Futures Exchange fell to 38,744 tons, their lowest since January 2024, weekly data showed on Wednesday.

The SHFE was closed for China's National Day and will reopen on October 8.

Supply concerns were not enough to offset the drag from a rising US dollar , which advanced to a 17-month high before paring gains.

A stronger dollar makes greenback-denominated commodities like copper more expensive for buyers using other currencies.

The dollar has been boosted by a global bond market rout, which has pushed borrowing costs across the globe to multi-decade peaks and battered the euro.

Investors are awaiting US September payrolls data, due on Friday, for clues on the health of the economy and to assess whether the Federal Reserve will raise rates again.

Among other LME metals, aluminium added 0.21%, zinc dipped 0.08%, lead ticked 0.08% higher, nickel added 0.17% and tin ticked 0.13% higher.