SHANGHAI, June 20 (Reuters) -
The U.S. Federal Reserve concludes a two-day policy meeting later, with expectations high that the central bank will extend its bond-buying programme dubbed "Operation Twist" to shore up the economy.
Three-month copper on the London Metal Exchange was down 0.4 percent at $
The most-active October copper contract on the Shanghai Futures Exchange climbed 0.8 percent to 55,090 yuan ($8,700) a tonne, catching up with previous gains in
"With Bernanke (Fed Reserve Chairman Ben Bernanke) speaking tonight, most investors will want to close off their positions by this afternoon, including the fresh longs which entered the market this morning," said Orient Futures Derivatives Director Andy Du.
The liquidity hit provided by previous doses of Fed stimulus has lifted riskier assets, and financial markets have become highly sensitive to expectations of further moves, with global equities and commodities tending to rise and the dollar coming under pressure when action is seen as increasingly likely.
"ShFE October copper contract price is also boosted by investors rolling over their September contracts. The investors involved are selling off their September contract and simultaneously buying the same volumes in October," he added.
A technical analysis of Shanghai copper suggest that it may end the current rebound either today or in the next trading session, as indicated by its wave pattern and a Fibonacci ratio analysis, said Reuters analyst Wang Tao.
Still, analysts have cautioned that Chinese end-users were still buying on a hand-to-mouth basis amid an uncertain economic outlook and sluggish domestic demand.
Hopes of a Fed stimulus were also tempered by fears that Spain's debt crisis could spiral out of control, with its soaring borrowing costs showing that a euro zone deal to lend its bank up to 100 billion euros ($126 billion) had not solved its problems or restored investor confidence. It also suggests more aid may be needed to fix its finances.
In China, a group of senior advisers have called on the government to relax property market restrictions to shore up its slowing economy, a state-backed newspaper reported on Wednesday. Such a move will likely boost base metal demand from the real estate sector.
Base metals prices at 0507 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7580.00 -29.00 -0.38 -0.26
SHFE CU FUT OCT2 55090 420 +0.77 -0.49
HG COPPER JUL2 342.55 -0.80 -0.23 -0.31
LME Alum 1925.00 -0.50 -0.03 -4.70
SHFE AL FUT OCT2 15710 25 +0.16 -0.85
LME Zinc 1892.75 -6.25 -0.33 2.59
SHFE ZN FUT SEP2 14895 35 +0.24 0.68
LME Nickel 17076.00 -19.00 -0.11 -8.73
LME Lead 1910.75 -1.75 -0.09 -6.11
SHFE PB FUT 15060.00 65.00 +0.43 -1.47
LME Tin 19600.00 70.00 +0.36 2.08
LME/Shanghai arb^ 1071
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3545 Chinese yuan)