London copper marked time on Wednesday ahead of the outcome of a U.S. Federal Reserve meeting that is expected to dictate the direction of the dollar, with dissipating concerns over mine supply dragging on prices for the metal.
London copper marked time on Wednesday ahead of the outcome of a U.S. Federal Reserve meeting that is expected to dictate the direction of the dollar, with dissipating concerns over mine supply dragging on prices for the metal. The US Federal Reserve is expected to lift rates at a meeting later on Wednesday. Traders were sidelined ahead of the meeting which may cause volatility in the dollar.
In general, copper prices will find strong support around $6,000 a tonne due to global supply shocks, said Argonaut Securities in a report.
“We rather think any price consolidations provide BUY opportunities in copper-related stocks,” it said.
Three-month copper on the London Metal Exchange edged up 0.1 percent to $5,826 a tonne by 0210 GMT, adding to small gains from the previous session. Prices last week fell to their lowest since Jan. 10 at $5,652 a tonne. Volumes were light with less than 1000 lots of turnover in the benchmark contract.
Shanghai Futures Exchange copper was trading up 0.5 percent at 47,590 yuan ($6,883) a tonne.
Analysts now expect a copper market deficit for 2017 after prolonged disruptions at the world’s two largest copper mines, Grasberg in Indonesia, and Escondida, in Chile even as the immediate disruption looks set to ease.
Escondida plans to restart operations after striking workers again rejected an invitation by controlling owner BHP Billiton , to return to negotiations, an executive told reporters late Tuesday.
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A strike at Peru’s top copper mine, Cerro Verde, may end next week if the labour ministry declares it illegal, the head of the union said on Tuesday after negotiations with owner Freeport-McMoRan Inc ended without an agreement on labour demands.
Reflecting a tempering of investor appetite towards copper, the total net long position of funds trading copper on the LME fell to 56,653 lots on Friday from a net long position of 70,580 lots the previous week, LME data showed.
The demand outlook for metals was encouraging. China issued a raft of upbeat data on Tuesday showing its economy got off to a strong start to 2017, supported by strong bank lending, a government infrastructure spree and a much-needed resurgence in private investment.
In other metals, LME tin slipped 1.2 percent, paring a 2.7-percent surge on Tuesday. Nearby prices <CMSNT-0> jumped to a $7 premium for those rolling positions for a day, which is likely to trigger more deliveries into LME warehouses.
Philippine lawmakers on Tuesday deferred a decision to confirm or reject an ardent environmentalist as the country’s resources minister, stoking uncertainty over the outlook for mining in the world’s top nickel ore supplier.