March 4, 2020 / 6:55 AM / 25 days ago

METALS-London copper climbs as dollar weakens after Fed rate cut

(Updates prices)

By Mai Nguyen

March 4 (Reuters) - London copper prices rose on Wednesday after an emergency rate cut from the U.S. Federal Reserve weakened the dollar, making commodities priced in the greenback cheaper for buyers using other currencies.

The Fed cut interest rates by half a percentage point on Tuesday to shield the world’s largest economy from the impact of the global coronavirus epidemic, leading to broad-based selling in the U.S. dollar.

Three-month copper on the London Metal Exchange (LME) rose as much as 1% to $$5,725.50 a tonne, but eased to $5,713.50 a tonne by 0707 GMT.

Meanwhile, the most-active copper contract on the Shanghai Futures Exchange (ShFE) closed 0.8% lower at 45,090 yuan ($6,500.30) a tonne.

“The fact that Fed delivered an emergency rate cut confirmed high downside risk for the global economy. Whether the rate cut can stimulate the economy is still a question,” said Yu Xiaojiang, an analyst at Anglo American.

“In the end, we need demand back, which will take time to recover, and not so soon I believe,” he added.

FUNDAMENTALS

* CHINA SERVICES: The impact of the outbreak in China is still being felt in the world’s No. 2 economy, with its services sector posting the worst month on record in February, as new orders plummeted to the weakest since the global financial crisis.

* VIRUS: The World Health Organization warned of a global shortage and price gouging for protective equipment to fight the coronavirus, which has spread to some 80 nations and infected around 91,000 people.

* ECB: The European Central Bank is preparing possible measures to provide liquidity to businesses hit by the economic fallout of the outbreak, sources told Reuters.

* PRICES: LME aluminium was almost unchanged at $1,721.50 a tonne and nickel advanced 1.3% to $12,725 a tonne, while LME zinc increased 1.2% to $2,000 a tonne.

* SHFE PRICES: ShFE aluminium fell 0.7% to 13,130 yuan a tonne, while ShFE zinc dropped 1.1% to 15,940 yuan a tonne.

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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 = 6.9366 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Devika Syamnath and Maju Samuel)

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