Copper price slips ahead of China data, Fed decision
London (June 12) Copper prices slipped on Monday ahead of a meeting of the U.S. Federal Reserve and economic data from top consumer China that could yield clues to future demand growth.
Benchmark copper on the London Metal Exchange was down 0.2 percent at $5,795 a tonne at 0930 GMT and compared with Friday's two-month high at $5,832.
"The market is waiting for the Fed meeting and Chinese economic data," said Commerzbank analyst Eugen Weinberg. "Until then it will take direction from equity and currency markets."
FED: A two-day meeting of the U.S. central bank that ends on Wednesday is expected to result in a U.S. interest rate rise. Investors will also be looking for clues to the timing and pace of further tightening.
CHINA DATA: China's economy is expected to show steady growth in May, buoyed by solid gains in trade and investment as economic ties with the United States take a positive turn and infrastructure spending cushions domestic growth. EQUITIES: A big fall in Apple suppliers and other tech stocks hurt European shares in opening trade on Monday, more than offsetting well-received election results in France and Italy. COPPER STOCKS: Traders were watching stock movements in LME approved warehouses which rose 2,700 tonnes to 279,575 tonnes, but overall inventories are still down more than 20 percent since May 4. COPPER TECHNICALS: Support at $5,785 near the 100-day moving average and $5,700 near the 55-day moving average.
DOLLAR: Industrial metals were supported by a lower U.S. currency, which when it falls makes dollar-denominated metals cheaper for non-U.S. firms, potentially boosting demand. NICKEL: Three-month nickel was down 0.1 percent at $8,970 a tonne. Earlier this month it touched a one-year low at $8,700 a tonne on expectations of rising supplies and week demand from stainless steel mills.
NICKEL SHORTS: "According to our latest estimates, the LME speculative short has increased to 16.3 percent of open interest, the largest short seen since late January 2016 when it peaked at 33.5 percent," Marex Spectron analysts said in a note.
NICKEL SURPLUS: "The nickel market, which had moved into deficit between supply and demand last year and in the first half of this year, is likely to move into small surplus during the remainder of 2017," Macquarie analysts said in a note.
TIN: Tin stocks at 1,910 tonnes are at their lowest since 1989, fuelling worries about a tight LME market, which has kept the premium for the cash over the three-month contract above $100 a tonne since May. PRICES: Aluminium was down 0.8 percent at $1,892 a tonne; zinc slid 0.5 percent to $2,512; lead ceded 0.4 percent to $2,090; and tin gained 1.5 percent to $19,090 a tonnes.
Source: Reuters
