Copper, zinc and aluminium rebounded from three-month lows on Wednesday as a sharp rise in oil prices, a firmer tone to equities and a retreat in the dollar buoyed metals prices ahead of a policy statement from the Federal Reserve.
Expectations that the Fed will announce another US rate hike, along with worries over the prospect of a global trade war, earlier weighed on industrial metals. They later recovered to move broadly higher.
‘The US dollar is weak, we have rising stock markets, which are leading the pace, and we have a strongly rising oil price,’ Commerzbank analyst Daniel Briesemann. ‘All these three factors are pushing the metals prices up.’
Metals are primarily reacting to macroeconomic factors in the absence of strong fundamental drivers, ABN Amro analyst Casper Burgering said. ‘We will have to wait for some good fundamental news before we see prices increase again,’ he said.
* LME COPPER: Three-month copper on the London Metal Exchange closed at $6,793 a tonne, up 0.6 per cent. Earlier it touched a three-month low of $US6,702.
* FINANCIAL MARKETS: Wall Street rose ahead of an imminent US interest rate hike, while the dollar retreated. Crude oil hit a six-week high after a surprise drop in US inventories and on concerns over possible disruption to Middle East supply.
* GLOBAL TRADE: President Donald Trump will likely announce tariffs on Chinese imports by Friday, a source in the administration said, as the top US trade diplomat told lawmakers he had the tools to strike back over Chinese theft of US tech know-how.
* COPPER SURPLUS: The global world refined copper market showed a 17,000 tonnes surplus in December, compared with a 41,000 tonnes deficit in November, the International Copper Study Group said in its monthly bulletin.
* LOS PELAMBRES: Workers at Antofagasta PLC’s Los Pelambres copper mine in Chile have opted to extend a period of government mediation in an effort to reach agreement on a new labour contract, an industry group said.
* ALUMINIUM PRICES: LME aluminium slid to its lowest since mid-December at $US2,062.50 a tonne before recovering to end the day at $US2,081 a tonne, up 0.2 per cent.
* ALUMINIUM: Global primary aluminium output excluding China dipped to 2.009 million tonnes in February from a revised 2.221 million tonnes in January, International Aluminium Institute (IAI) data showed on Tuesday.
* OTHER METALS: LME zinc ended at $US3,249 a tonne, up 1.4 per cent and off an earlier three-month low of $US3,183, while lead closed 2.1 per cent higher at $US2,400 a tonne. Nickel finished up 0.1 per cent at $US13,460 a tonne, and tin ended up 1.6 per cent at $US21,000.s)