(Updates prices)
By Mai Nguyen
Jan 31 (Reuters) - Copper prices dropped on Tuesday
after traders exercised caution ahead of an eventful week that
will include central bank meetings and as physical demand in top
consumer China remained stagnant.
Three-month copper on the London Metal Exchange was
down 1% at $9,115 a tonne by 0807 GMT, while the most-traded
March copper contract on the Shanghai Futures Exchange dipped 0.7% to 69,240 yuan ($10,254.13) a tonne.
The U.S. Federal Reserve's Federal Open Market Committee
(FOMC) is due to end its two-day meeting on interest rates on
Wednesday. Interest rate announcements are due on Thursday from the
Bank of England and the European Central Bank - and both are
expected to hike rates by 50 bps. "Markets are weaker because of FOMC and they appear weak
because of the run-up while China was on break," said a metals
trader.
Traders are also squaring some positions ahead of the U.S.
non-farm payroll data due on Friday.
"It's taking risk off the books when it's such a binary
incident," the trader added.
However, SHFE copper still posted a 5% gain in January, and
LME copper is on track for the third monthly rise, backed by a
weaker U.S. dollar, rising inflows from funds and hopes that
Chinese demand for the metal will improve following the removal
of its strict COVID-19 restrictions.
China's manufacturing activity swung back to growth in
January, beating expectations, as a wave of COVID-19 infections
passed through the country faster than expected.
However, physical demand of copper in China remained tepid.
LME aluminium fell 1.1% to $2,561.50 a tonne, zinc declined 1.3% to $3,402.50 a tonne, tin shed
2.7% to $29,000 a tonne, and lead eased 0.7% to $2,133 a
tonne.
SHFE aluminium eased 0.8% to 18,925 yuan a tonne,
tin declined 2% to 233,940 yuan a tonne, lead eased 0.5% to 15,210 yuan a tonne while zinc rose 0.1%
to 24,300 yuan a tonne.
SHFE nickel was up 1.5% at 222,540 yuan a tonne.
Earlier in the session, it hit 224,140 yuan a tonne, its highest
in nearly four weeks, as the Philippines considered taxing
nickel ore exports.
For the top stories in metals and other news, click or ($1 = 6.7524 yuan)
(Reporting by Mai Nguyen in Hanoi; Editing by Sherry
Jacob-Phillips and Uttaresh.V)
mai.nguyen.thomsonreuters.com@reuters.net))
LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES ))
