LONDON: Prices for copper and other base metals fell in London on Wednesday as expectations for demand growth from top consumer China receded after a promise from Beijing to support economic recovery was not backed up by specific measures.
Traders and investors in growth-dependent metals are focused on a widely expected US Federal Reserve interest rate rise due later in the day and on any clues for the rate path ahead.
Three-month copper on the London Metal Exchange was down 0.7% at $8,614 per metric tonne by 1626 GMT, after rising for the previous two sessions.
The metal, used in power and construction, is still up 2% so far this week after China’s top leaders pledged on Monday to optimise property policies, expand domestic demand and speed up local special bond issuance.
“The metals markets are easing back ahead of the FOMC (US Federal Open Market Committee) meeting and as there was nothing concrete on the stimulus promise from the Chinese government,” said Robert Montefusco at broker Sucden Financial.
Meanwhile, copper inventories in LME-approved warehouses have climbed 12% over the last two weeks to 60,700 metric tonnes, and available - on-warrant - stocks jumped.
An easing of concerns about metal availability in the LME system has pushed the discount for cash copper over the three-month contract to $32.25 a metric tonne, the biggest in two months, compared with a premium of $31 a month ago.
Technically, copper is supported on Wednesday by the 100-day moving average at $8,558.
Citi expects the metal to trade in a $7,500-$8,500 range over the next six-to-nine months, its analysts wrote in a research note.
LME aluminium shed 1.2% to $2,213 a metric tonne, zinc fell 0.6% to $2,473, lead was down 1.6% at $2,144, tin rose 0.6% to $29,065, and nickel slid 3.7% to $21,630.
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