Copper edges up after Fed chief vows to keep rates low

LONDON: Copper prices ticked higher on Wednesday as investors gained confidence after the head of the US central bank vowed to keep interest rates low to boost economic recovery.

Three-month copper on the London Metal Exchange (LME) rose 0.2% to $9,321 a tonne in official trading. It had dropped 8.6% last week, its biggest weekly fall since March 2020, on fears that US monetary policy would soon tighten.

"After the dramatic falls of last week, this could be a good entry level if you're an investor or a consumer," said independent consultant Robin Bhar.

"I suspect for the next few months we'll consolidate sideways. Maybe that will be the mantra of summer - buy the dips, sell the rallies and then reassess how things are evolving going forward."

Bhar said it was positive that prices last week held above $9,000, a technical level marking a long-term uptrend, but a break below that could send prices tumbling by another $1,000.

US Federal Reserve Chair Jerome Powell on Tuesday assured markets that interest rates would not be raised too quickly based only on the fear of coming inflation.

In China, the most-traded July copper contract on the Shanghai Futures Exchange closed 2% higher at 68,480 yuan ($10,562.36) a tonne.

The pricing department of China's National Development and Reform Commission and the country's market regulator have sent teams to various Chinese provinces and cities to investigate bulk commodity prices and supplies.

China's Zhejiang Huayou Cobalt's first nickel and cobalt project in Indonesia will have capital expenditure coming in below target, a company official said.

Glencore Chief Executive Ivan Glasenberg said copper supplies need to increase by one million tonnes a year until 2050 to meet expected demand of 60 million tonnes.

LME aluminium shed 0.4% to $2,416 a tonne, zinc gained 0.8% to $2,883.50, nickel rose 0.7% to $17,869, lead added 0.4% to $2,182.50 and tin was down 0.1% at $30,364.