LONDON: Copper prices rose on Wednesday, recouping losses from the previous session, as investors waited for the release of minutes from the latest Federal Reserve meeting.
The minutes will likely show how serious the Fed is about tapering its asset buying and how soon it could begin to hike rates, with a hawkish turn potentially knocking riskier assets.
Benchmark copper on the London Metal Exchange (LME) was up 1.6% at $9,465 a tonne at 1600 GMT.
Copper fell 2.1% on Tuesday as oil prices, stock markets and US bond yields fell and the dollar rallied, making metals costlier for buyers outside the United States.
The dollar rose again on Wednesday and oil and bond yields fell, but stock markets were more resilient.
Copper hit a record high of $10,747.50 a tonne in May and increasing demand for the metal for electrification and infrastructure should keep prices supported, said WisdomTree analyst Nitesh Shah.
“It’s not just that demand is rising, it’s that the supply seems to be lacking,” he said. “Prices have got higher to go, though I wouldn’t rule out a few months’ pause.”
German industrial output fell 0.3% month on month in May, below analysts’ expectations.
Copper hovered around its 100-day moving average at $9,426 and 50-day moving average at $9,497. Moves below these levels would worsen its technical outlook.
China will use timely cuts in the bank reserve requirement ratio (RRR) to support the real economy, state media quoted the cabinet as saying.
China said it would continue to release stocks of copper, aluminium and zinc to cool prices.
China said it aims to churn out 20 million tonnes of recycled non-ferrous metal.
Peru’s socialist president-in-waiting expects mining firms to be won over to “prudent” plans to hike taxes on mineral resources.
Plans by Russia to impose taxes on exports of aluminium have fuelled a surge in spot market costs for consumers in Europe and the United States.
A jump in demand for traditional lead-acid car batteries and lingering freight problems have created shortages and driven up lead prices.
Benchmark aluminium was 1.2% lower at $2,499 a tonne, zinc rose 0.8% to $2,958.50, nickel was 1.8% higher at $18,325, lead was down 0.2% at $2,289.50 and tin was flat at $31,680.