Copper up in thin business

Copper prices inched up in very thin trade on Thursday as investors stayed largely on the sidelines to wait for the US Federal Reserve's decision later in the day on interest rates.
London Metal Exchange copper for delivery in three months was at $6,910 a tonne, up $10 from the previous day's London close. The metal had traded as high as $6,950 on electronic trading platform Select.
"I think it's not easy for investors to take any action until the Fed announces its monetary policy later today," said Tetsu Emory, chief commodities strategist at Mitsui Bussan Futures in Tokyo. The Federal Reserve is widely expected to lift its benchmark federal funds rate for a 17th straight time on Thursday, to 5.25 percent from 5 percent, while some in the market were predicting a wider hike of 50 basis points.
The focal point will be on the post-meeting statement which investors will monitor for clues to the pace of future policy tightening. A bigger rate rise would lift the dollar, making dollar-based commodities more expensive to consumers and investors with other currencies, slowing economic growth and dampening demand for industrial metals.
On Wednesday, copper ended up $160, or 2.4 percent, at $6,900, supported by historically low inventory levels and threats to supply in Mexico, Chile and elsewhere. Dealers said strikes at two Grupo Mexico's copper facilities and demands for a pay rise of up to 10 percent and improved health benefits at BHP Billion's Escondido mine in Chile would continue to limit losses in copper.
Prices of copper, a barometer for industrial demand, reached a record $8,800 on May 11. Since then the red metal has fallen 21 percent as investors pulled their money out of metals and equity markets amid interest rate hikes in Europe and Asia.
But copper, used in construction and electronics, has gained 57 percent in value since the end of last year. In electronic trade, the most active September copper fell 3.00 cents to $3.1570 a lb after trading $3.1355 and $3.1800 on the New York Mercantile Exchange's Comex division.