By Eileen Soreng
Dec 15 (Reuters) – London copper prices held steady on Wednesday as investors cautiously awaited cues on how soon the U.S. Federal Reserve would start raising interest rates, while sentiment got a lift amid hopes of further stimulus measures from top consumer China.
Three-month copper on the London Metal Exchange CMCU3 was steady at $9,417 a tonne, as of 0525 GMT, but hovered close to a one-week low hit in the previous session.
The most-traded January copper contract on the Shanghai Futures Exchange SCFcv1 was down 0.2% at 68,760 yuan a tonne.
“Copper prices are seeing buy-the-dip reaction as it approaches yesterday’s low,” a Singapore-based trader said, requesting anonymity.
Prices of copper, often used as a gauge of global economic health, are likely to remain supported as China speeds up fiscal stimulus and ease monetary conditions, while “interest rate hikes in the United States would be slow with the Fed still believing inflation to be transitory,” he added.
The U.S. central bank’s two-day policy meeting is due to wrap up later in the day with investors expecting the Fed to announce a faster end of its bond-buying programme and then proceed with an interest rate hike from near zero.
An early rate hike could trim liquidity in financial markets and slow recovery in the world’s biggest economy.
Meanwhile, China’s central bank injected funds into the financial system through medium-term loans, while keeping the interest rate unchanged. Its earlier decision to lower banks’ reserve requirement ratio also came into effect on Wednesday.
FUNDAMENTALS
* LME aluminium CMAL3 eased 0.4% to $2,619 a tonne, zinc CMZN3 fell 1% to $3,273 a tonne, nickel CMNI3 inched 0.1% lower to $19,505 a tonne and lead CMPB3 was down 0.6% at $2,271.5 a tonne.
* ShFE aluminium SAFcv1 fell 0.8% to 19,065 yuan a tonne, nickel SNIcv1 dropped 0.9% to 142,050 yuan a tonne, lead SPBcv1 was down 2.6% at 15,330 yuan a tonne and tin SSNcv1 was 1.4% lower at 282,420 yuan a tonne.
* China’s aluminium output in November fell slightly from the previous month, official data showed, hit by an explosion at a smelter in Yunnan and lingering curbs on energy consumption.
* Peru’s government on Tuesday failed to host a planned meeting between MMG Ltd’s 1208.HK Las Bambas copper mine and a local community that has been blocking the road used by the firm to transport its metal for 25 days, threatening a complete production halt.
* The global nickel market saw a small surplus of 5,000 tonnes in October, data from the International Nickel Study Group (INSG) showed.
* For the top stories in metals and other news, click
TOP/MTL or MET/L
($1 = 6.3640 yuan)
(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)
(([email protected]; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: [email protected]))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com