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ShFE-LME Metals Stumble; London Copper Falls on Stronger Dollar

17 Sep 2020 10:58 am
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Mumbai (Commodities Control) –Nonferrous metals on both SHFE and LME declined across the board in early trading on Thursday as investors reacted to developments from the US Federal Reserve which said it would keep interest rates near zero for years until the US economy heals from the effect of the coronavirus pandemic.

London copper fell by the most in seven sessions on Thursday as the dollar climbed after the U.S. Federal Reserve said it expected the post-coronavirus recovery to gain steam in the world's largest economy.

London Metal Exchange copper fell as much as 1.5% to $6,676 a tonne, before paring losses to trade at $6,693 a tonne by 0345 GMT, reversing gains from the previous session. Prices on Tuesday came within $1 of 26-month highs of $6,830 from the start of the month.

Shanghai Futures Exchange copper eased by 0.8% to 51,360 yuan ($7,579) a tonne, hitting its lowest in four sessions.

LME nickel fell 1.5%, LME zinc slipped 1.3%, LME lead fell 0.7% and LME tin declined by 0.8%.

The Fed signaled on Wednesday it expected the U.S. economic recovery from the coronavirus crisis to accelerate, with unemployment falling faster than its forecast in June.

Following the Fed's comments, the dollar index rose to a more than one-week high against its rivals, diminishing the buying power of commodity consumers paying with other currencies.

Freeport-McMoRan Inc does not want to be distracted by any buyout offers and is focused on expanding its Grasberg copper-and-gold mine in Indonesia and boosting cash flow, Chief Financial Officer Kathleen Quirk said on Tuesday.

Shanghai base metals, except for aluminium and zinc, closed lower in overnight trading. Copper slid 0.14%, lead fell 0.63%, nickel weakened 0.78% and tin declined 0.25%, while aluminium added 0.14% and zinc advanced 0.2%.

Their counterparts on the LME traded mixed on Wednesday. Copper rose 0.5%, zinc climbed 0.92% and tin inched up 0.14%, while aluminium edged down 0.03%, lead weakened 0.92% and nickel declined 0.16%.

Three-month LME copper is likely to move between $6,720-6,780/mt today. The most-active SHFE 2010 copper contract is expected to trade between 51,400-51,900 yuan/mt today.

(COmmodities Control Bureau)




       
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