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METALS-LME copper extends falls on guarded Fed, weak demand

Thu, 19th Sep 2019 05:58

(Updates prices)

By Mai Nguyen

SINGAPORE, Sept 19 (Reuters) - London copper edged lower onThursday and was headed for a fourth straight session of falls,after the U.S. Federal Reserve signalled a higher bar for futurerate cuts and as a weak demand outlook for the red metalcontinued to weigh on the market.

The Fed lowered rates by 25 basis points on Wednesday asexpected, but Chair Jerome Powell said the central bank wouldstop cutting rates "when we think we've done enough", describingthe U.S. economic outlook as "favorable".

"It seems like the outcome (of the Fed's meeting) is alittle bit lower than expectations," a China-based metalsanalyst said.

A rate cut could lead to a weaker U.S. dollar, makinggreenback-priced metals cheaper for holders of other currencies.

Three-month copper on the London Metal Exchange (LME)fell 0.6% to $5,781 a tonne by 0726 GMT, while themost-traded copper contract on the Shanghai Futures Exchange(ShFE) dipped 0.4% to 47,070 yuan ($6,626.59) a tonne.

"China's demand for copper remains sluggish. The increase inproduction and weak demand are still headwinds to rebalance themarket," Argonaut analyst Helen Lau said in a note, adding thatcopper prices were seen trading in a tight range for some time.

FUNDAMENTALS

* PRICES: LME aluminium rose 0.1%, nickeledged down 0.1%, lead rose 0.7%, zinc fell 0.7%and tin gained 0.8%. ShFE aluminium declined asmuch as 1.1% to a one-month low, while zinc dropped 1%.

* ZINC: The global zinc market swung into a 4,200-tonnedeficit in July from a revised surplus of 13,800 tonnes in June,data from the International Lead and Zinc Study Group showed.

* LEAD: The deficit in the global lead market narrowed inJuly to 4,200 tonnes from a shortfall of 13,100 tonnes in June,data from the International Lead and Zinc Study Group showed.

* Fitch Solutions forecast the lead market would be indeficit in 2019 and in surplus during 2020-2021 before turningto deficit again from 2022 due to a pick-up in demand fromlead-batteries suppliers for the automobile industry.

* COPPER: Significantly lower prices of copper and itsbyproduct cobalt have driven an increase in the number ofproducers making losses, a development expected to deter themfrom investing in new capacity.

* COPPER TC: China's spot treatment charges for copperconcentrate <AM-CN-CUCONC>, assessed by industry data providerAsian Metal, have fallen 39.3% so far this year to $55.50 atonne, well below the 2019 long-term benchmark of $80.80.

* LME: The LME will postpone plans to ban metal tainted byhuman rights abuses until 2025, giving producers three moreyears to comply with guidelines and the exchange time to rethinkits approach, industry sources said.

* For the top stories in metals and other news, clickor

PRICES

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

ARBS($1 = 7.1032 Chinese yuan renminbi)(Reporting by Mai Nguyen;Additional reporting by Tom Daly in Beijing;Editing by Dale Hudson and Subhranshu Sahu)

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