LONDON: Copper slipped on Tuesday as the dollar rose ahead of a decision on US rates by the Federal Reserve, but expectations of stronger demand for the metal from top consumer China helped buttress prices.
Benchmark copper on the London Metal Exchange was untraded in official rings, but was bid 0.5 percent lower at $5,770 a tonne. The metal used in power and construction is up more than 2 percent since hitting a two-month low at $5,652 last week.
The Fed's two-day meeting is expected to conclude on Wednesday with a rate rise, which could boost the US currency, making dollar-denominated metals more expensive for non-US firms and potentially weaken demand.
"A lot will depend on what the Fed does, but the demand signals from China are improving, the data was positive," Citi analyst David Wilson said.
China issued data on Tuesday showing the economy got off to a strong start to 2017, supported by bank lending, a government infrastructure spree and a much-needed resurgence in private investment.
China accounts for just under half of global copper demand, which is estimated at around 23 million tonnes this year.
Copper was also supported by disruptions in Chile and Peru due to strikes and in Indonesia, where the government has halted exports of copper concentrate from Freeport-McMoRan's Grasberg mine.
"Supply side issues should continue to support metal prices; however investors are likely to remain cautious leading into the FOMC (Fed) meeting and other key economic releases," ANZ analysts said in a note.
Three-month nickel was down 0.3 percent at $10,125 a tonne. The stainless steel ingredient was underpinned though by prospects of a full-scale mining ban in the Philippines, the world's top exporter of nickel ore.
Philippine President Rodrigo Duterte accused some miners of funding efforts to destabilise his government and he talked about a possible plan to impose a ban on mining given the environmental damage producers have caused.
Aluminium fell 1.1 percent to $1,862, zinc lost one percent to $2,717.5, lead slid 2.3 percent to $2,222 and tin gained 0.8 percent to $19,600.
Comments
Comments are closed for this article.