LONDON: Prices for copper and other base metals fell in London on Wednesday as hopes for demand growth from top consumer China dimmed after Beijing’s promise to support economic recovery did not roll out any specific measures.
Traders and investors in growth-dependent metals are focused on a widely expected U.S. Federal Reserve interest rate rise due later in the day and any clues for the rate path ahead.
Three-month copper on the London Metal Exchange was down 1% at $8,590.5 per metric ton by 1109 GMT, after rising for the previous two sessions.
The metal, used in power and construction, is still up 1.7% so far this week as 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 (U.S. 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.
Copper hits one-week high on Chinese property stimulus hopes
Meanwhile, copper inventories in LME-approved warehouses have climbed 12% over the last two weeks to 60,700 metric tons, and available - on-warrant - stocks jumped.
Easing concerns about metal availability in the LME system have pushed the discount for cash copper over the three-month contract to $32.25 a metric ton, the biggest in two months, compared with a premium of $31 a month ago.
On the technical front, 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 0.7% to $2,224 a metric ton, zinc was stable at $2,487, lead was down 0.7% at $2,165, tin lost 0.3% to $28,805, and nickel slid 2.5% to $21,895.
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