Shanghai Futures Exchange copper cut losses to 0.1 percent at 53,220 yuan ($8,452) a tonne on Wednesday as investors shrugged off slightly softer-than-expected Chinese manufacturing data on Tuesday to edge higher as the dollar eased, but conviction was lacking ahead of the outcome of the Federal Reserve's two-day meeting. Metals found a firmer footing after the dollar inched lower against a basket of major rivals on Wednesday, showing scant reaction so far to US President Donald Trump's State of the Union address.
Standard Chartered said however given a "more favourable macro environment - a weaker US and our expectations for global growth" it has raised some of its metals price forecasts, including for copper by $550 to $7,150 a tonne for this year. Even thought the import differential favours shipping copper into China at the minute, traders are cautious because they do not want to hold stock over Chinese New Year, a trader said. The Lunar New Year holiday starts on Feb. 15.
Growth in China's manufacturing sector slowed more than expected in January to an eight-month low in the face of a cooling property market and tighter pollution rules that have curtailed factory output. The official Purchasing Managers' Index (PMI) dipped to 51.3 in January, from 51.6 in December. China is drawing up plans to extend curbs on smog over the 2018-2020 period, an environment ministry official said on Wednesday, after a five-year crackdown on pollution helped it meet its air quality targets last month.
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