SINGAPORE: Copper prices in London edged down on Tuesday, with investors eyeing a Federal Reserve meeting and a U.S.-China trade talk aimed at resolving a year-long trade dispute.
The U.S. Federal Reserve is expected to lower interest rates by 25 basis points after a two-day meeting, potentially weakening the U.S. dollar and making greenback-priced metals cheaper for holders of other currencies.
Meanwhile, U.S. and Chinese officials are due to meet on Tuesday in Shanghai for talks related to the trade dispute that has weighed on global economic growth and demand for industrial metals.
Three-month copper in London rose in Asian trading hours, but retreated as European traders entered the market to fall 0.2% to $6,008.50 a tonne by 0733 GMT, while Shanghai copper rose 0.8% to 47,240 yuan ($6,860.30) a tonne.
Other metals moved mixed, with aluminium edging up 0.1%, zinc advancing 0.5%, nickel falling 0.4% and lead increasing 0.2%.
"Market will be closely watching the FOMC (Fed) meeting and the trade talks between the U.S. and China for further price guidance. A positive progress on trade talks could extend the price gains across the metals," said analyst Soni Kumari of ANZ.
FUNDAMENTALS
* COPPER: Copper treatment charges fell to $57 a tonne on Monday, its lowest since November 2012, according to latest data assessed by Asian Metal. <AM-CN-CUCONC>
* "Treatment charges ... reflect the tightness in the concentrate market. We believe this will trickle through the refined market as smelter's margin deteriorates," Kumari said.
* TRADE TALKS: Expectations for progress at the U.S.-China trade meeting are low, with U.S. President Donald Trump saying he thinks China may not want to sign a trade deal until after the 2020 election.
* SHANGHAI PRICES: The most-traded aluminium contract on the Shanghai Futures Exchange edged up 0.4%, zinc advanced 1.6% and lead rose 0.9%, while nickel jumped 2.1%.
* "Although nickel is one of our top picks among industrial metals given the sustained market deficit, we see recent rally lacks a strong fundamentals support," Kumari said.
* CHINA POLL: Factory activity in China is expected to have contracted for the third month in a row in July, a Reuters poll showed, underlining the intensifying strains on China's economy from a protracted trade war with the United States.
* JAPAN: Japan's exports of zinc in June fell 8.2% from a year earlier to 5,198 tonnes, while refined copper exports dipped 3.8% during the same period to 55,469 tonnes.
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