METALS-Copper hovers near 6-week highs as markets await the Fed

  • 7/28/2021
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(Updates with official prices, adds price poll) July 28 (Reuters) - Copper prices sat near six-week highs on Wednesday as investors waited for details from a Federal Reserve meeting that could shift expectations for U.S. monetary policy. Wider markets, meanwhile, calmed after days of turmoil emanating from China, with global stock markets, the dollar and the yuan steadying. Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $9,719 a tonne in official trading after reaching $9,924 on Tuesday, its highest since June 15. Used in power and construction, copper rose to a record high of $10,747.50 in May. It is up around 25% this year after rising 26% in 2020, with some analysts saying strong demand and tight supply could push prices still higher. “The supercycle is alive and kicking, hasn’t gone away, isn’t dead, and therefore you want to buy the dips,” said Robin Bhar, an independent analyst. “The fly in the ointment is if the Fed starts talking about tapering to begin next year,” he said. “But the underlying themes are bullish.” POLL: A Reuters poll of 23 analysts returned a median forecast for copper to average $9,000 in the fourth quarter. FED: A statement is due at 1800 GMT with a news conference by Chairman Jerome Powell expected half an hour later. CHINA DEMAND: Demand for commodities in China, the biggest consumer of raw materials, will likely slow in the second half of 2021, but copper demand should remain strong due to subsidies for offshore wind projects, consultants Wood Mackenzie said. CHINA STOCKS/PREMIUM: Copper stocks in Shanghai Futures Exchange (ShFE) warehouses are below 100,000 tonnes from almost 230,000 tonnes in May, and Yangshan copper import premiums have doubled since the start of July, pointing to rising demand for overseas metal. CU-STX-SGHSMM-CUYP-CN LME STOCKS: However, inventories in LME-registered warehouses, at 230,225 tonnes, are the highest since June 2020. MCUSTX-TOTAL ALUMINIUM: Cash aluminium on the LME has flipped to a $10.50 premium against the three-month contract from a $20 discount two weeks ago, pointing to tighter supply of quickly deliverable metal. MAL0-3 PRICES: Aluminium was up 0.6% at $2,504.50 a tonne, zinc fell 0.6% to $2,965.50, lead rose 0.2% to $2,344, tin added 0.9% to $34,695 and nickel was 1.3% higher at $19,600. (Reporting by Peter Hobson Additional reporting by Mai Nguyen Editing by Jan Harvey and Mark Potter) Our Standards: The Thomson Reuters Trust Principles.

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