LONDON: Copper prices edged up in London on Wednesday after hitting their lowest in more than two weeks, but remained under pressure from concerns about demand from top consumer China and caution ahead of the US Federal Reserve’s interest-rate decision.
Three-month copper on the London Metal Exchange rose 0.3% to $9,017 per metric ton in official open-outcry trading after hitting $8,950, its lowest since Dec. 2.
Copper, used in power and construction, has been trading in a tight range for a month as investors watch for developments on import tariffs threatened by US President-elect Donald Trump and for more clarity on China’s economic recovery path. The sentiment towards growth-dependent metals was further hit this week by a set of China’s November data which disappointed the market with slower retail sales growth, even though the country’s industrial output grew ahead of expectations.
Supporting copper on the supply side, China’s official statistics data showed on Wednesday its refined copper production fell 1.6% to 1.13 million tons in November. Meanwhile, aluminium prices fell 0.6% to $2,526.5 a ton in official activity. The metal is trading close to a month-low for the second consecutive session amid China’s November aluminium production output growth.
“Longer term, outlook for aluminium is looking more bullish with an expected deficit likely to support prices at higher levels,” Ewa Manthey, a commodities analyst at ING, said. The US dollar held firm on Wednesday before the Fed policy meeting which is expected to deliver a so-called hawkish cut, trimming rates but suggesting fewer cuts may lie ahead.
The focus is on how much further Fed officials think they will reduce rates next year. Reduced borrowing costs support prospects for growth-dependent metals. In other metals, zinc slipped 0.8% to $3,010 a ton, lead was down 0.2% at $1,982.5, tin rose 0.4% to $29,175 and nickel added 0.3% to $15,550.
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