Copper drifted lower on Tuesday as investors were reluctant to make big bets ahead of a US Federal Reserve meeting that could herald an easing of monetary policy, which could undermine the dollar and boost metals. Three-month copper on the London Metal Exchange ended the day at $7,680 a tonne, from Monday's close of $7,715.
The Federal Open Market Committee holds its one-day meeting on Tuesday and an announcement is expected at 1815 GMT. "The market feels the current value of metals is fully priced in now," said Alex Heath, head of base metals at RBC Capital Markets. "It is looking for fresh incentives...If we get something fundamental from Fed, that would be an important one."
Demand for refined copper from the world's largest consumer of the metal rose strongly in August, leading a broad increase in apparent consumption of metals, Reuters calculations based on official Chinese data showed. Latest LME data showed that LME stocks fell across all major contracts bar lead. Copper stocks slipped 2,475 tonnes to 382,500 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.
Cancelled warrants, or copper tagged for removal from LME-registered warehouses stand at 29,175 tonnes, or 7.7 percent of the total, up from 5 percent at the start of June. Aluminium traded at $2,175 per tonne from $2,195 per tonne on Monday. The metal used in transport and packaging touched $2,223 on Monday, its highest level since August 6.
Prices have been bolstered by financing deals, which are said to have tied up about 70 percent of LME aluminium stocks and talk of a physically backed exchange-traded product. Three-month tin was at $23,000 a tonne, down from Monday's $23,500 a tonne.
It hit a two-year high of $23,800 a tonne last week on the back of tightening supply from top exporter Indonesia. Steel ingredient nickel ended at $22,350 a tonne from $23,050 on Monday. Battery material lead was bid at $2,174.5 from $2,195, zinc traded at $2,142 from $2,180.
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