Rising inventories pull down copper
Copper futures were under pressure on Tuesday as inventories of the metal jumped a hefty 6.8%, pushing down prices on the London Metals Exchange.
By Agencies |
LONDON: Copper futures were under pressure on Tuesday as inventories of the metal jumped a hefty 6.8%, pushing down prices on the London Metals Exchange. Falling gold and oil prices contributed to the fall, traders said, in a market lacking direction and constrained ahead of a meeting of the US Federal Reserve on interest rates that concludes on Wednesday.
LME copper futures for delivery in three months were at $7,445 a tonne in the official open-outcry rings, down $100 from Monday's close. Copper stocks in LME-monitored warehouses rose some 7,750 tonnes overnight to 120,825 after a 7,075-tonne increase in Singapore. “We think there is more to come,” a trader said, adding “I am aware of another 10,000 tonnes that are likely to come onto warrant.”
The policy-making Federal Open Market Committee (FOMC) is expected to keep US rates steady at 5.25% for the third meeting in a row, switching the market’s focus to the statement that accompanies the decision, slated for Wednesday. On Friday the market will see advance numbers for US GDP for the third quarter and analysts are predicting a 2.2% rise.
Market watchers said copper’s willingness to track oil was symptomatic of a market that lacked direction.
“When it starts to track energy, it’s a sign that there are no sufficiently compelling fundamentals,” a fund source said. Aluminium fell to $2,686 from $2,705 and zinc was steady, paring an earlier $60 fall to end the midsession quoted $5.50 lower at $3,994.50/3,995.00. Last weak zinc touched a record $4,020.
Nickel was $50 lower at $32,350, near a new peak of $32,625 hit last week on supply concerns in New Caledonia and globally tight stocks.
LME copper futures for delivery in three months were at $7,445 a tonne in the official open-outcry rings, down $100 from Monday's close. Copper stocks in LME-monitored warehouses rose some 7,750 tonnes overnight to 120,825 after a 7,075-tonne increase in Singapore. “We think there is more to come,” a trader said, adding “I am aware of another 10,000 tonnes that are likely to come onto warrant.”
The policy-making Federal Open Market Committee (FOMC) is expected to keep US rates steady at 5.25% for the third meeting in a row, switching the market’s focus to the statement that accompanies the decision, slated for Wednesday. On Friday the market will see advance numbers for US GDP for the third quarter and analysts are predicting a 2.2% rise.
Market watchers said copper’s willingness to track oil was symptomatic of a market that lacked direction.
“When it starts to track energy, it’s a sign that there are no sufficiently compelling fundamentals,” a fund source said. Aluminium fell to $2,686 from $2,705 and zinc was steady, paring an earlier $60 fall to end the midsession quoted $5.50 lower at $3,994.50/3,995.00. Last weak zinc touched a record $4,020.
Nickel was $50 lower at $32,350, near a new peak of $32,625 hit last week on supply concerns in New Caledonia and globally tight stocks.
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