January 29, 2015 / 10:24 AM / in 5 years

METALS-Copper down after Fed meeting, inventories rise

* China copper trades at discount to ShFE; signals weak
    * LME nickel rally capped by high stocks even as premiums

 (Updates with closing prices)
    By Eric Onstad
    LONDON, Jan 29 (Reuters) - Copper and other metals prices
fell on Thursday on worries about excess supply and after U.S.
central bank authorities gave more signals of a looming rate
    Inventories of both copper and nickel in London Metal
Exchange (LME) warehouses continued to increase on Tuesday with
nickel hitting a record, evidence of the ample supply. 
    "Macro forces are largely dominating the market today, and
over the near term, market attention will remain fixated on
Greece and the Fed," said Xiao Fu, head of commodity market
strategy at Bank of China International in London. 
    Three-month copper on the LME closed 1.6 percent
lower at $5,390 a tonne, having earlier fallen to a session low
of $5,346 -- not far from Monday's 5-1/2 year trough of
$5,339.50 a tonne.
    The Federal Reserve on Wednesday said the U.S. economy was
expanding "at a solid pace" with strong job gains, in a signal
that the central bank remains on track with plans to raise
interest rates this year.     
    News that top metals consumer China plans to cut its
economic growth target to the lowest in 11 years at around 7
percent in 2015 also tainted sentiment. 
    "Copper is drifting around looking for direction, but bias
is to the downside in Asia, particularly from investors in this
region," said analyst Daniel Hynes of ANZ in Sydney. "The Asian
market certainly sees weaker demand particularly through the
first half of the year."
    In a signal of dwindling demand for physical metal in China
that could undermine LME prices, physical copper in the local
market was trading at a discount to the front month ShFE futures
contract on Wednesday. 
    LME copper and nickel inventories climbed again on Thursday,
adding 2,775 tonnes and 1,836 tonnes respectively. Copper stocks
are up more than a third so far this month and nickel touched a
record at 425,562 tonnes. 
    Copper failed to get much support even after three industry
sources told Reuters that China's stockpiler plans to buy about
200,000 tonnes of refined copper in 2015 from the international
    Nickel fell 0.9 percent to $14,900 a tonne.
    "Even though nickel ore stocks at Chinese ports have
declined for 10 consecutive weeks, the prices of nickel ore,
nickel pig iron and stainless steel have also been declining,
which shows that demand has been weak," Fu said.
    Aluminium closed 1.8 percent lower at $1,819 a
tonne, zinc shed 1.3 percent to end at $2,090 and lead
 closed 1.4 percent lower at $1,860 a tonne.
    Tin, untraded at the close, was bid at $19,150 a
tonne, down 0.5 percent. 
    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          
    Three month LME tin             

 (Additional reporting by Harpreet Bhal in London Melanie Burton
in Melbourne, editing by Jon Boyle and Susan Thomas)
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