SHANGHAI, Nov. 21 (SMM) – Three-month copper on the London Metal Exchange closed Wednesday down at USD 6,977/mt. Codelco, the world’s top copper producer, raised on Wednesday its term premium for 2014 to Chinese copper buyers by USD 40/mt to USD 138/mt, the highest since 2005. 

The euro plunged against the US dollar on Wednesday in the week of a report that the European Central Bank (ECB) is considering negative deposit rates.

The minutes of the FOMC’s latest policy meeting, though not mentioning the timing of QE3-tapering, discussed how to scale back asset-buying program. The greenback rebounded following the release of the minutes, pressuring commodity prices. 

US economic indicators released overnight came in mixed. Retail sales rose unexpectedly by 0.4% in October from a month earlier. CPI dipped 0.1% MoM on a seasonally adjusted basis in October, the first decline since April. Existing home sales fell to a seasonally adjusted annual rate of 5.12 million in October.   

The US dollar index added 0.47%, while the euro slid 0.81% against the greenback. European and US shares mostly fell, while Asian stock markets swung between gains and losses. Base metals on the LME came in mixed. 

HSBC’s flash China manufacturing PMI for November, due to be announced today, may point to mild growth, but this will lend little support to copper prices. A stronger US dollar will cause LME three-month copper to open lower on Thursday and move within USD 6,920-6,980/mt during the Asian trading hours. The Shanghai Composite Index will hover around 2,200 points. SHFE 1402 copper contract will fluctuate between RMB 49,800-50,300/mt after a low opening. In spot markets, a premium of RMB 80-180/mt is expected over SHFE 1312 copper contract.