March 16, 2017 / 4:32 AM / 3 years ago

METALS-London copper hits over 1-wk top as dollar drops in wake of Fed

* Global zinc market in 27,000 T deficit in Jan -ILZSG

* Global lead market deficit deepens to 15,000 T in Jan -ILZSG

* Coming up: U.S. housing starts, building permits Feb at 1230 GMT (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, March 16 (Reuters) - London copper shrugged off a hike in near-term interest rates in China to hit its highest in more than a week on Thursday, with the dollar dropping after the U.S. raised rates but showed no signs of speeding up its pace of tightening.

China’s central bank raised short-term interest rates on Thursday in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the Fed’s rate increase.

Higher costs of capital in the world’s biggest user of metals could dampen industrial activity, but the market remained focused on the weaker dollar.

“The Fed’s rate hike is within market expectation but ...(its commentary) dampened the expectations that Fed may raise rates for more than three times for 2017,” Argonaut said in a report.

“This weakened the dollar and supported commodity price increases. All metals increased, with copper prices (supported) as supply disruptions at mines in Chile, Peru and Indonesia continue to add to concerns over supply deficits.”

Three-month copper on the London Metal Exchange had climbed 1 percent to $5,924.50 by 0706 GMT, extending gains from the previous session. Prices earlier touched their strongest since March 6 at $5,929.50 a tonne.

Shanghai Futures Exchange copper rose 1.5 percent to 48,040 yuan ($6,969) a tonne.

Wall Street’s top banks see two additional U.S. interest rate rises this year and most expect at least three more in 2018, a Reuters poll showed on Wednesday.

Meanwhile, Indian billionaire Anil Agarwal said on Wednesday he would buy a stake of up to 2 billion pounds ($2.46 billion) in Anglo American, but had no intention of trying to take control of the global miner.

In other metals, ShFE zinc jumped 3.6 percent, having ridden on the coattails of a steel rally driven by China’s infrastructure push, and signs of a deepening deficit. The global zinc market recorded a deficit of 27,000 tonnes in January after clocking up a revised surplus of 8,800 tonnes in December, data from the Lisbon-based International Lead and Zinc Study Group (ILZSG) showed.

ShFE lead also ended up 2.7 pct. The global lead market deficit more than doubled to 15,000 tonnes in January from a shortfall of 7,000 tonnes in December, according to ILZSG.


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 = 6.8935 Chinese yuan) (Reporting by Melanie Burton; Editing by Joseph Radford and Subhranshu Sahu)

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