Reuters.- Copper prices rebounded on Wednesday, while the dollar stabilized ahead of US inflation data and the Federal Reserve’s decision on interest rates.
Traders noted that expectations of a dovish statement from the Federal Reserve and the weakening of the U.S. currency – which makes metals priced in dollars cheaper for holders of other currencies – had triggered widespread buying in industrial metals.
Benchmark copper on the London Metal Exchange (LME) rose 0.6% to $9,815 per metric ton at 1129 GMT. It hit a seven-week low of $9,680 a ton on Tuesday.
“The focus is on the US CPI data and what the Federal Reserve says and, more importantly, the dot chart,” said one copper trader, adding that the market was also on the downside. Expect lending and total social financing (TSF) data from top consumer China this week.
The Federal Reserve is generally considered to keep rates between 5.25% and 5.5%. The “dot plot” is your updated economic projection.
Copper has fallen 11.6% from its all-time high of $11,104.5 reached on May 20.
High stock levels point to low buying appetite. Copper stocks remained at their highest level in four years, at 336,964 tonnes, in warehouses overseen by the Shanghai Futures Exchange (ShFE).
Among other base metals, tin rose 3.2% to $32,925 a ton, after falling to a one-month low last week. So far this year it has gained 31.3%.
ShFe tin stocks fell 9.4% since the beginning of June, to 16,297 tonnes.
Aluminum fell 0.1% to $2,530, zinc rose 1.9% to $2,823, lead gained 0.2% to $2,161, and nickel fell 0.1% to $2,161. $17,795.
