Sep 21, 2011 NEW YORK (Dow Jones)--Copper futures rebounded from 11-month lows as investors viewed the market's steep three-session slide as an opportunity to buy and some traders bet that the Federal Reserve's policy announcement later Wednesday would lift to growth-sensitive assets.
The most actively traded copper contract, for December delivery, was recently up 1.2 cent, or 0.3%, at $3.7375 a pound on the Comex division of the New York Mercantile Exchange.
Market participants were looking ahead to Wednesday's conclusion of the two-day meeting of the Federal Open Market Committee. The central bank is widely expected announce some stimulative measure to prop up the flagging U.S. economy, with Fed watchers singling out the likelihood that the bank will sell short-term bonds and buy longer-term investments.
The FOMC policy statement is expected at 2:15 p.m. EDT.
Any moves by the Fed to encourage economic activity could boost demand for growth-sensitive assets such as copper, market participants say. The metal is particularly sensitive to the growth outlook because of its widespread uses across industries, and futures have been hit hard in recent weeks as investors curbed their expectations for global growth.
The most-active copper contract Tuesday settled at the lowest level since September 2010 as the International Monetary Fund cut its expectations for growth, building on worries about euro-zone debt and a potential credit crunch. Market participants fear that a slowdown in the U.S. and Europe would upset the market despite steady demand from top consumer China.
Expanded Chinese trade data for August suggest that apparent copper consumption in the world's top consumer hit a record high last in August, analysts with Barclays Capital said in a note. Imports were likely boosted, analysts said, as Chinese buyers took advantage of the steep dip in prices since July.
Also Tuesday, Freeport-McMoRan Copper & Gold Inc. (FCX) said its production would be hurt by the ongoing labor dispute at its Grasberg gold and copper mine in Indonesia. A 30-day strike by unionized miners began last week, limiting mining, milling and shipping activities, the company said. The hit to copper output is estimated at 3 million pounds for every day of the strike, Freeport said in a statement.