Commodities

London copper falls, marks time ahead of Fed outcome

Reuters Melbourne | Updated on January 24, 2018 Published on March 18, 2015

opper

London copper fell on Wednesday, amid worries about China’s property market, and was braced for further dollar strength ahead of a Federal Reserve meeting that could yield clues on the timing of a US interest rate hike.

China consumer demand remains tepid a month after the Lunar New Year, while smelters are producing ample supply. But several miners have cut supply forecast which is expected to impact refining capacity later in the year, underpinning prices.

“I haven’t been hearing lots of reports of demand after Lunar New Year — the market is very quiet right now. It seems this year will be another slow year,’’ said analyst Judy Zhu of Standard Chartered in Shanghai.

China home prices

Construction has been one weak area for copper demand. China’s average new home prices fell at the fastest pace on record in February from a year earlier, hurt by slower sales during the Lunar New Year holidays, but developers and analysts expected prices to slowly recover.

Three-month copper on the London Metal Exchange fell 1 per cent to $5727 a tonne by 0702 GMT, extending 1-percent losses from the previous session.

“Demand is weak — we certainly haven’t seen any strong consumer demand in Asia,’’ said a trader at a bank in Singapore.

May contract slumps

The most-traded May copper contract on the Shanghai Futures Exchange slid 2.4 per cent to 41,620 yuan ($6,675) a tonne. Prices touched their lowest in four sessions.

Soft demand was evident in ShFE spreads for copper and zinc, where cash prices have traded below three-month prices this week, while premiums for copper stock in Shanghai bond fell $2 to $88.

Newmont Mining Corp’s Indonesian copper export permit will be extended for six months on Wednesday after the company gave assurances over its commitment to build a smelter with Freeport-McMoRan Inc.

However, boosting supply risks, top copper producer Codelco said it was still working to get a key production unit at its newest mine running at capacity, following a delayed and problematic start-up process.

Also, workers blocked access to Freeport’s huge Indonesian copper mine for a third day over a wage dispute.

Fed officials are expected to drop the phrase “patient’’ from their so-called forward guidance on interest rates, raising prospects of a June to September rate hike, at a meet later in the session.

Published on March 18, 2015
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