February 15, 2017 / 3:38 AM / 3 years ago

METALS-London copper steadies above $6,000 as supply worries persist

* Philippines doubles down on mine crackdown, cancels permits

* China bonded nickel premiums jump $15 to $180 as arb opens

* Coming Up: U.S. Industrial production Jan at 1415 GMT (Adds detail, updates prices)

By Melanie Burton

MELBOURNE, Feb 15 (Reuters) - London copper prices steadied on Wednesday to hold above the $6,000-mark, shrugging off a stronger dollar and finding support from supply disruptions at the world’s two biggest mines.

Throwing up headwinds for commodities, the dollar firmed after Federal Reserve Chair Janet Yellen signalled a faster pace of U.S. interest rate increases at her two-day testimony before Congress.

A stronger dollar tends to weigh on commodities by dampening buying power of those paying with other currencies.

“Markets are likely to remain choppy as traders digest a more hawkish Fed with increasing supply side concerns,” said ANZ in a report.

Three-month copper on the London Metal Exchange edged up 0.2 percent to $6,035 a tonne by 0724 GMT, following a 1.4 percent loss the session before.

Prices powered through the $6,000-level on Friday after BHP Billiton declared force majeure on shipments from the Escondida mine, hitting their highest since May 2015 at $6,204 a tonne on Monday.

Escondida’s workers and BHP said they had agreed to renew talks on Wednesday.

Shanghai Futures Exchange copper slid 2.4 percent to 48,740 yuan ($7,095) a tonne.

Workers at the world’s largest copper mine in Chile are digging in for a long strike, emboldened by new labour laws that are likely to result in tough wage negotiations in the industry in 2017 in one of Latin America’s most free-market economies.

LME nickel was little changed at $10,780 a tonne, but not far from its highest since mid December, buoyed by prospects of a supply shortage.

In the Philippines, the world’s top nickel exporter, the environment minister stepped up a crackdown on mining on Tuesday, cancelling almost a third of the country’s contracts for undeveloped mines and rejecting any challenges to earlier orders to shut over half of all operating pits.

The mining closures have left China’s vast stainless steel industry struggling for a key input material.

Premiums for nickel in Shanghai bonded zones shot up by $15 to $180 <0#BASEBW-SHMET> this week, the highest since August last year, as a trader said that the price differential between Shanghai and LME turned attractive for imports.

China’s nickel inventories are near the lowest since May SNI-TOTAL-D, while port ore stocks are 1.07 million tonnes, the least since 2011. MYSTL-INKO-TTPR

Elsewhere, LME aluminium edged up 0.2 percent after a draft policy document suggested China will constrict production next winter to help improve air quality.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.8694 Chinese yuan $1 = 6.8696 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Richard Pullin and Biju Dwarakanath

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