Copper steadies below record as Fed caution tempers gain
- The benchmark three-month copper on the London Metal Exchange gained 0.67% to $11,564 a ton
SHANGHAI: Copper prices hovered below record highs on Wednesday, as investors braced for a possibly hawkish guidance from the US Federal Reserve following its two-day policy meeting.
The most traded copper contract on the Shanghai Futures Exchange was down 0.37% at 91,720 yuan ($12,987.27) a metric ton as of 0315 GMT.
Meanwhile, the benchmark three-month copper on the London Metal Exchange gained 0.67% to $11,564 a ton.
Copper’s upward momentum unwound as the Fed’s rate decision approached, with the market expecting a “hawkish cut” in December at a time when inflation concerns lingered and resilience in the United States’ economy remained, dampening hopes for more cuts next year. Caution over future rate cuts has led investors to scale back their positions, and expected supply strain outside the US is keeping prices elevated and volatile, analysts at Chinese broker Jinrui said in a note.
Copper prices were recently driven to record highs by expectations that supply will remain tight outside the US market and by mine disruptions.
Meanwhile, China’s consumer inflation accelerated to a 21-month peak in November, but factory-gate deflation persisted even as the government stepped up its campaign to curb overcapacity in some key sectors.
Elsewhere in the market, shareholders of Canadian miner Teck Resources on Tuesday approved the merger with Anglo American, paving the way for the case to move to the regulators’ table for review. Among other metals on SHFE, aluminium dipped 0.34%, zinc dropped 0.43%, lead lost 0.84%, nickel declined 0.73% and tin posted sole gain at 0.72%.
Among LME metals, aluminium gained 0.63%, zinc added 0.49%, lead was up 0.33%, nickel gained 0.31% and tin rose 1.11%.
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