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Commodities : Copper trades in tight range as demand outlook, Fed rate jitters weigh


BEIJING, July 7 (Reuters) – Copper prices in London
edged higher on Friday, although gains were limited as investors
awaited more clues on the U.S. Federal Reserve’s interest rate
trajectory and demand outlook in top consumer China.

Three-month copper on the London Metal Exchange was
up 0.5% at $8,300 per metric ton by 0454 GMT, after losses in
the previous session amid selling across risk asset classes.

The contract slid 0.2% so far this week.

The dollar index held in a tight range on Friday as
investors awaited a key U.S. jobs report and weighed the
prospect of higher-for-longer Federal Reserve interest rates
against the economic growth outlook.

Data on Thursday pointed to a more resilient U.S. economy
and raised the likelihood of further interest rate hikes by the
Fed, denting investor sentiment.

The most-traded August copper contract on the Shanghai
Futures Exchange dipped 0.2% to 67,720 yuan ($9,349.98)
per metric ton.

Higher completion rates in China’s property sector and
the new energy industry have been the key drivers for copper and
aluminium demand, analysts at Guosen Futures said.

Domestic supply, however, of the two metals is likely to
expand. Copper smelters would be incentivized to ramp up
production amid multi-year high charges, and aluminium
production in the southwestern Yunnan province is also rising.

Copper premiums in Chinese spot market <SMM-CU-PND> dropped
to 60 yuan per ton on Thursday from 440 yuan earlier in the
week, indicating better supply.

LME aluminium gained 0.3% to $2,134.50, tin
was unmoved at $28,530, zinc added 0.1% to $2,365, lead
moved up 0.3% to $2,056.50, and nickel nudged
0.1% up to $21,225.

SHFE Zinc rose 0.5% at 20,115 yuan, nickel
gained 0.6% to 164,670 yuan, tin was up 1.3% at 233,870
yuan, while lead shed 0.2% to 15,505 yuan, and
aluminium dipped 0.1% to 17,830 yuan a ton.

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($1 = 7.2428 Chinese yuan)
(Reporting by Siyi Liu and Dominique Patton; Editing by Rashmi
Aich and Sherry Jacob-Phillips)

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