October 29, 2015 / 3:37 AM / 5 years ago

METALS-London copper pressured by U.S. Dec rate hike view

* China bonded copper premiums fall to 2-mth low at $95-$100

* LME aluminium dragged down by record low ShFE prices

* Coming up: U.S. GDP Advance Q3 at 1230 GMT (Adds detail; updates prices)

By Melanie Burton

MELBOURNE, Oct 29 (Reuters) - London copper slipped on Thursday on increased prospects of a U.S rate hike in December, which boosted the dollar and made commodities more expensive for holders of other currencies.

Analysts are still cautious over the strength of metals demand in top user China, where manufacturing activity data due at the weekend is expected to show a small improvement in October, fuelling hopes that the world’s No.2 economy may be bottoming out after a burst of stimulus measures.

“There are some that see demand a bit better, but overall we haven’t seen an obvious pickup in demand,” said analyst Chunlan Li of CRU in Beijing. Still, increased spending by the state grid gave some cause for optimism, she said.

China said in September it would spend at least 2 trillion yuan ($315 billion) to improve its power grid infrastructure over the 2015-2020 period.

“It’s a good signal ... it could mean that demand might be better later this year or in Q2 2016.”

Demand is traditionally quiet in the first quarter of the year due to the Lunar New Year holidays.

Three-month copper on the London Metal Exchange had edged down 0.3 percent to $5,186.50 a tonne by 0709 GMT, adding to small losses in the previous session when it fell to its weakest since Oct. 8 at $5,134.50.

Shanghai Futures Exchange copper slipped 0.2 percent to 39,030 yuan ($6,140) a tonne.

China bonded copper premiums have dropped to $95-$100 from $105-$115, which is the lowest since mid-August, as global prices hold gains better than local prices, making imports less attractive. CU-BMPBW-SHMET

China’s October imports are likely to be lower than September given a week-long holiday.

However, China’s economy could overshoot the International Monetary Fund’s forecast and grow close to 7 percent this year, a senior IMF official said on Wednesday. He added that the outlook for the medium term is more uncertain.

ShFE aluminium hit another record low and is fasting approaching the 10,000 yuan mark amid dropping input costs in China, ShFE tin also declined 1.4 percent.

The U.S. Federal Reserve kept interest rates unchanged on Wednesday and in a direct reference to its next policy meeting put a December rate hike firmly in play.

Nickel miners are cutting costs, rather than production, exerting more medium term pressure on nickel prices, which fell 1 percent on Thursday.

Canadian miner Sherritt International Corp is planning deeper cost cuts at its two nickel mines as prices remain low for the metal used to make stainless steel and production cuts that would boost prices prove stubbornly elusive.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.3588 Chinese yuan renminbi $1 = 6.3566 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford

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