METALS-Copper strikes 16-month high, set for best week in a year

By Tom Daly

Oct 3 (Reuters) - Copper hit a 16-month high on Friday and was poised to record its strongest week in more than a year as supply constraints and a softer dollar boosted prices.

Three-month copper on the London Metal Exchange CMCU3 was up 2.2% at $10,719 per metric ton as of 1600 GMT and on course for a weekly gain of 5.3% that would mark its best week since September 2024.

The metal, used in power and construction, earlier touched $10,765, the highest since May 2024, when it hit an all-time peak of $11,104.50.

"The focus is squarely on the supply side - the risk to supply and the potential delay in getting supply back. That's helping drive the momentum," said Ole Hansen, head of commodity strategy at Saxo Bank.

The market "hasn't looked back" since breaking through resistance at around $10,160 last week after Freeport-McMoRan's FCX.N force majeure at its Grasberg mine, Hansen added.

Copper stocks in the LME warehouse system MCUSTX-TOTAL have sunk to 140,475 tons, the lowest since the start of August.

In the United States, Comex copper prices HGc1 rose 3.1% to $5.05 per lb ($11,133 per ton), crossing the $5 per lb mark for the first time since late July.

The dollar index =USD, which measures the dollar against a basket of currencies, was on track for its worst weekly showing since July. A softer dollar makes metals more affordable for holders of other currencies.

Tin CMSN3 continued its recent ascent, rising as much as 2.2% to $37,695, the highest since April 2. It eased to $37,005 by 1600 but was still set for a weekly jump of 8.6% and its best week since April 2024.

Aluminium CMAL3 rose 0.6% to $2,709, nickel CMNI3 gained 1% to $15,465, and zinc CMZN3 climbed 0.4% to $3,031.50, having hit $3,039.50 earlier in the session, its highest since December 31. Lead CMPB3 shed 0.2% to $2,019.50.