Copper traded near a seven-week high in New York before the start of a Federal Reserve policy meeting projected to result in a further cut in U.S. economic stimulus as growth strengthens in the country.
The Fed will lower its monthly asset purchases by another $10 billion to $45 billion, according to economists surveyed by Bloomberg. U.S. durable-goods orders rose the most since November last month and an index of leading economic indicators reached a four-month high, data showed in April. The nation is the world’s second-biggest copper consumer after China.
“Another $10 billion tapering announcement could be bullish for the dollar, but bearish for copper,” Naeem Aslam, chief market analyst at Ava Capital Markets Ltd. in Dublin, said by e-mail today. “The Fed are only tapering because they believe the economy is becoming stronger, and this is a positive influence for copper in the long run.”
Copper for delivery in July fell 0.2 percent to $3.0875 a pound by 6:50 a.m. on the Comex in New York. Prices reached $3.1045 yesterday, the highest since March 7. Copper for delivery in three months rose 0.1 percent to $6,755 a metric ton on the London Metal Exchange.
Gains by the dollar make commodities priced in the currency more expensive in terms of other monies. The two-day Fed meeting starts today.
Copper stockpiles monitored by the LME, down 36 percent this year to the lowest since October 2012, declined for a sixth session to 235,075 tons, daily data showed. Orders to remove the metal from warehouses gained for a second day to 106,475 tons, the first back-to-back increases since December.
Nickel for delivery in three months added 0.6 percent to $18,280 a ton in London. Prices jumped 32 percent this year on concern Western sanctions against Russia over its intervention in Ukraine might curb supply already squeezed by Indonesia’s January ban on exports of raw mineral ores.
Concerns about sanctions are overstated, said Vladimir Potanin, the billionaire who runs Moscow-based OAO GMK Norilsk Nickel, the biggest producer of the metal. The Indonesian ban is the “key nickel price driver,” he said in an interview.
Aluminum, zinc and lead fell in London. Tin was unchanged.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at email@example.com