|19 September, 2019

LME copper dips after Fed clouds rate-cut outlook

Three-month copper on the London Metal Exchange (LME) eased 0.2% to $5,803 a tonne

Image used for illustrative purpose. Copper rods are seen at Truong Phu cable factory in northern Hai Duong province, outside Hanoi, Vietnam August 11, 2017.

Image used for illustrative purpose. Copper rods are seen at Truong Phu cable factory in northern Hai Duong province, outside Hanoi, Vietnam August 11, 2017.

REUTERS/Kham

SINGAPORE  - London copper prices edged lower on Thursday, after the U.S. Federal Reserve lowered rates by 25 basis points as expected but signalled a higher bar for future rate cuts.

Describing the U.S. economic outlook as "favorable", Fed Chair Jerome Powell said the central bank would stop cutting rates "when we think we've done enough" and that they were going to make decisions "meeting by meeting".

A rate cut could lead to a weaker U.S. dollar, making greenback-priced metals cheaper for holders of other currencies.

Three-month copper on the London Metal Exchange (LME) eased 0.2% to $5,803 a tonne by 0228 GMT, while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) dipped 0.2% to 47,140 yuan ($6,639.44) a tonne.

FUNDAMENTALS

* PRICES: LME aluminium, nickel and lead rose 0.1% each, zinc dipped 0.1% and tin gained 0.4%. ShFE aluminium and zinc fell 0.6% each, while nickel rose 0.7%.

* ZINC: The global zinc market swung into a 4,200 tonne deficit in July from a revised surplus of 13,800 tonnes in June, data from the International Lead and Zinc Study Group showed.

* LEAD: The deficit in the global lead market narrowed in July to 4,200 tonnes from a shortfall of 13,100 tonnes in June, data from the International Lead and Zinc Study Group showed.

* COPPER: Significantly lower prices of copper and its byproduct cobalt have driven an increase in the number of producers making losses, which is expected to deter them from investing in new capacity.

* LME: The LME will postpone plans to ban metal tainted by human rights abuses until 2025, giving producers three more years to comply with guidelines and the exchange time to rethink its approach, industry sources said.

MARKETS NEWS

* Asian shares edged higher, tracking some modest Wall Street gains after the U.S. Federal Reserve cut interest rates as expected but offered mixed signals on the next easing, keeping investors cautious.

DATA/EVENTS AHEAD

0830 UK Retail Sales MM, YY Aug

0830 UK Retail Sales Ex-Fuel MM Aug

1100 UK BOE Bank Rate Sept

1100 UK BOE QE Corp Sept

1230 US Initial Jobless Claims weekly

1230 US Philly Fed Business Index Sept

1400 US Existing Home Sales Aug

Japan BOJ Rate Decision

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 7.1000 Chinese yuan) (Reporting by Mai Nguyen; Editing by Subhranshu Sahu)

© Reuters News 2019

More From Commodities