Thursday, 19 March 2015 20:22
LONDON: Copper rebounded on Thursday, recovering from a one-month low in the previous session, on rising expectations that a U.S. rate hike would be delayed and after output was halted at one of the world’s biggest copper mines.
Metals were swept up with other markets, including a rise in world shares towards all-time highs, after the Federal Reserve sounded less likely to act aggressively in raising interest rates than investors had anticipated.
“There’s broad-based support across commodities from the Fed guidance, but we don’t think that alone will sustain a rally in base metals,” said Nicholas Snowdon, metals analyst Standard Chartered in London.
“It remains an environment with an acute focus on Chinese demand conditions, and anecdotes point to only a modest supply chain activity increase so far in March.”
Metals held on to gains even after the dollar snapped back, regaining its strength following a sharp drop after the Fed meeting. A softer greenback makes dollar-denominated commodities cheaper for holders of other currencies.
London Metal Exchange copper failed to trade in official open outcry trading at midday, but was bid up 2.5 percent to $ 5,810 a tonne, well above Wednesday’s one-month low of $ 5,621.50.
Also boosting copper was news from Indonesia that production has been halted at the Grasberg mine, one of the world’s biggest, as workers blocked an access road to the site for a fourth day.
“The ongoing production disruption at Grasberg, which has the potential to have a material effect on supply, is also supportive for prices,” Snowdon said.
The protest by workers has not affected copper treatment fees so far, but could if it drags on, an Asia-based concentrates trader said.
In other metals, LME nickel, also untraded in official rings, was bid 1.3 percent higher at $ 13,675 a tonne, recovering from Wednesday’s 14-month low.
Data showed there was still a global nickel surplus of 5,200 tonnes in January, although narrower than December’s 17,200 tonnes, according to the International Nickel Study Group.
Aluminium traded up 1 percent in official rings at $ 1,781 a tonne and zinc added 1.2 percent to $ 2,012.
Japanese aluminium premiums for April-June shipments were mostly set at $ 380 per tonne, down 11 percent and the first drop in six quarters, six sources directly involved in the talks said.
Lead, untraded in rings, was bid up 0.5 percent to $ 1,696 a tonne while tin was bid unchanged at $ 16,850, after both metals hit their weakest levels in 57 months on Wednesday.
Copyright Reuters, 2015
