SINGAPORE, June 18: London copper eased for a second straight session on Tuesday, with investors cautious as they wait for more clues on the outlook for U.S. Stimulus at a two-day Federal Reserve meeting starting later in the day.
Asian shares fell while commodities were on the back foot, with the mere suggestion of fine-tuning in the Fed’s bond buying programme enough to unnerve markets.
‘The copper market has been reluctant to rally despite news on supply disruptions,’ said analyst Sijin Cheng at Barclays Capital in Singapore. ‘The FOMC meeting is a big factor.’
Three-month copper on the London Metal Exchange had dropped 0.2 percent to $7,070.50 a tonne by 0406 GMT. Copper prices finished last week down nearly 2 percent in their steepest weekly decline since mid-April.
The most-traded October copper contract on the Shanghai Futures Exchange fell 1.1 percent to 51,160 yuan a tonne.
Market volatility was likely to remain elevated until the outcome of the Fed meeting and Chairman Ben Bernanke’s news conference on Wednesday.
Bernanke has said the Fed may decide on slowing its $85 billion monthly purchases of Treasuries and mortgage-backed securities in its next few meetings if the economy showed signs of improving.
Supply concerns have underpinned copper with operations at Freeport McMoRan Copper and Gold Inc’s mine in Indonesia shut for the past month after a deadly tunnel collapse.
The firm declared force majeure last week to free itself from obligations to deliver copper concentrate from the Grasberg mine.
Still, data showed LME stocks <MCUSTX-TOTAL> jumped by 11,400 tonnes, reminding investors of an expected surplus this year.
In other metals, aluminium prices ticked higher, snapping an eight-session losing streak on bargain-hunting. LME three-month aluminium rose 0.2 percent to $1,848 a tonne after dropping to its weakest since May 15 in the last session.
The aluminium sector, burdened by overproduction, was jolted on Monday when LME data showed an inflow of 59,600 tonnes of stocks <MALSTX-TOTAL> into warehouses, which sent the total to a new record of 5.28 million tonnes.
Base metals prices at 0406 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7070.50 -12.50 -0.18 -10.85
SHFE CU FUT OCT3 51160 -560 -1.08 -11.69
HG COPPER JUL3 3.19 -0.01 -0.20 -12.64
LME Alum 1848.00 4.00 +0.22 -10.85
SHFE AL FUT OCT3 14555 -130 -0.89 -7.12
LME Zinc 1862.00 4.00 +0.22 -10.48
SHFE ZN FUT SEP3 14540 -35 -0.24 -9.44
LME Nickel 14105.00 -185.00 -1.29 -17.32
LME Lead 2110.00 1.50 +0.07 -9.44
SHFE PB FUT 14170.00 20.00 +0.14 -11.71
LME Tin 20300.00 -100.00 -0.49 -13.25
LME/Shanghai arb^ -659
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
(agencies)
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