Copper dipped to a three-month low on Wednesday as nervous investors waited for signals on US interest rates and developments in Greek debt talks. Zinc hit a 2-1/2 month low after inventories rose again, raising questions over forecasts for shortages later this year. "The market will be marking time, I suppose, right up until the official statement from the Fed," said Robin Bhar, head of metals research at Societe Generale in London.
The US Federal Reserve is due to conclude its policy meeting with a statement at 1800 GMT that could give indications of when it might raise rates for the first time in almost a decade. Uncertainty over whether Greece will secure a last-minute deal with its creditors and avoid default also made investors jittery. Three-month copper on the London Metal Exchange touched a session low of $5,728 a tonne, its weakest since March 19. It failed to trade in closing open-outcry activity and was bid down 0.1 percent at $5,744.50.
Copper slid 1.3 percent in the previous session and has shed 11 percent since early May, largely over worries about weak demand in top metals consumer China. "Given the extent of the downward move (over the past month), one would expect sellers to have abated for now, reassessing the fortunes of the dollar and how the US economy is faring as well as the on-off negotiations with Greece," Bhar said.
Also weighing on copper was a slightly firmer dollar, which makes commodities priced in the US currency more expensive for buyers using other currencies. Another concern was uncertainty about the strength of copper demand from top user China. "People here are very bearish at the moment, because the peak consumption season is already over - the market has turned very quiet again and end-users have seen order books shrinking," said Judy Zhu, an analyst at Standard Chartered in Shanghai.
She said copper may revisit the 5-1/2 year lows below $5,350 a tonne hit in late January. LME zinc dropped to a low of $2,074 a tonne, its weakest since April 1, and closed down 0.7 percent at $2,078. LME inventories rose again, and have now increased by 50,000 tonnes, or 12 percent, over the past month. Some investors have been betting that mine closures would create shortages, but the recent rise in stocks has clouded the picture.
LME nickel finished unchanged at $12,750 a tonne, though downward pressure could persist, given losses in Shanghai of 1.8 percent. Some investors there have been betting that the Shanghai exchange would approve more global nickel brands for delivery, easing a supply bottleneck. Aluminium ended down 0.2 percent at $1,704 a tonne while lead added 0.2 percent to $1,802 and tin gained 0.3 percent to close at $14,750.
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