London copper steady as investors eye crucial Fed policy decision

Dec 15 (Reuters) – London copper prices held steady on Wednesday as investors cautiously awaited cues on how soon the U.S. Federal Reserve would start raising interest rates, while sentiment got a lift amid hopes of further stimulus measures from top consumer China.

Three-month copper on the London Metal Exchange was steady at $9,417 a tonne, as of 0525 GMT, but hovered close to a one-week low hit in the previous session.

The most-traded January copper contract on the Shanghai Futures Exchange was down 0.2% at 68,760 yuan a tonne.

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“Copper prices are seeing buy-the-dip reaction as it approaches yesterday’s low,” a Singapore-based trader said, requesting anonymity.

Prices of copper, often used as a gauge of global economic health, are likely to remain supported as China speeds up fiscal stimulus and ease monetary conditions, while “interest rate hikes in the United States would be slow with the Fed still believing inflation to be transitory,” he added.

The U.S. central bank’s two-day policy meeting is due to wrap up later in the day with investors expecting the Fed to announce a faster end of its bond-buying programme and then proceed with an interest rate hike from near zero. read more

An early rate hike could trim liquidity in financial markets and slow recovery in the world’s biggest economy.

Meanwhile, China’s central bank injected funds into the financial system through medium-term loans, while keeping the interest rate unchanged. Its earlier decision to lower banks’ reserve requirement ratio also came into effect on Wednesday. read more

* LME aluminium eased 0.4% to $2,619 a tonne, zinc fell 1% to $3,273 a tonne, nickel inched 0.1% lower to $19,505 a tonne and lead was down 0.6% at $2,271.5 a tonne.

* ShFE aluminium fell 0.8% to 19,065 yuan a tonne, nickel dropped 0.9% to 142,050 yuan a tonne, lead was down 2.6% at 15,330 yuan a tonne and tin was 1.4% lower at 282,420 yuan a tonne.

* China’s aluminium output in November fell slightly from the previous month, official data showed, hit by an explosion at a smelter in Yunnan and lingering curbs on energy consumption. read more

* Peru’s government on Tuesday failed to host a planned meeting between MMG Ltd’s (1208.HK) Las Bambas copper mine and a local community that has been blocking the road used by the firm to transport its metal for 25 days, threatening a complete production halt. read more

* The global nickel market saw a small surplus of 5,000 tonnes in October, data from the International Nickel Study Group (INSG) showed.

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Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.