Copper Pulls Back Ahead of Fed Minutes

By Ed Ballard 

LONDON--The recent rally in copper prices stalled on Wednesday, despite ongoing production outages at two big mines that have raised concerns over global supply.

The London Metal Exchange's three-month copper contract was down 0.5% at $6,025 a metric ton, within the range of recent sessions. Other base metals were mixed.

A strengthening U.S. dollar was making dollar-priced commodities more expensive for holders of other currencies. The WSJ Dollar Index was up 0.05% at 91.33, close to a one-month high.

The downward pressure could intensify later in the session depending on what the market gleans from the minutes of the U.S. Federal Reserve's January policy meeting, which could tilt expectations of how aggressively the Fed will increase interest rates this year.

Workers at BHP Billiton Ltd.'s Escondida mine in Chile, the world's largest, are on strike, while Freeport-McMoRan Inc. is in a standoff with the Indonesian government over permission to export copper concentrate produced at the Grasberg mine.

Analysts at brokerage firm Marex Spectron said base metals were put under pressure overnight by Chinese data showing home prices rose in 45 cities last month out of 70 cities tracked--the fewest in a year.

In addition to the supply risk from Chile and Indonesia, Marex said LME data showing large drawdowns of zinc, aluminum and tin overnight provided some additional support for metals prices.

Lead was up 0.8% at $2,282 a ton. Nickel was down 0.1% at $10,820 a ton and tin was down 0.1% at $19,730 a ton. Aluminium and zinc were little changed at $1,883 a ton and $2,870 a ton respectively.

Write to Ed Ballard at [e-mail]

(END) Dow Jones Newswires

February 22, 2017 06:10 ET (11:10 GMT)

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