June 5, 2019 / 8:11 AM / 2 months ago

METALS-Most metals rise as dollar weakens on dovish Fed comments

(Updates prices)

By Mai Nguyen

SINGAPORE, June 5 (Reuters) - Most industrial metals rose on Wednesday as the U.S. dollar weakened on dovish comments from the Federal Reserve but gains were capped after International Monetary Fund (IMF) cut China’s growth forecast raising demand concerns.

The dollar struggled to bounce off a seven-week low after U.S. central bank officials hinted at the possibility of an interest rate cut. A weaker dollar makes dollar-denominated metals cheaper for imports by countries using other currencies.

Fed Chairman Jerome Powell on Tuesday dropped his standard reference to the Fed being “patient” in approaching any rate decision, saying instead the central bank was watching fallout from the trade war and would react “as appropriate”.

“The subsequent dovish tone in his speech is likely to buoy investors in coming sessions,” said Daniel Been of ANZ in a note.

But gains were capped amid concerns of a slowing economy and weaker demand for metals, with the International Monetary Fund (IMF) on Wednesday cutting its 2019 economic growth forecast for China to 6.2% on heightened uncertainty around trade frictions.

China’s services activity also grew at its slowest pace in three months in May.

FUNDAMENTALS

* LONDON COPPER: Three-month copper on the London Metal Exchange (LME) rose as much as 0.4% to $5,903.50 a tonne, its highest since May 30. The contract eased later in the session and was almost flat at 0751 GMT.

* SHANGHAI COPPER: The most-traded copper contract on the Shanghai Futures Exchange also touched its highest in nearly a week at 46,630 yuan ($6,749.36) a tonne in early trade before easing to 46,490 yuan at close.

* LME PRICES: London aluminium advanced 0.5%, lead rose 1% and tin edged up 0.1%. Zinc and nickel were almost unchanged.

* U.S. MANUFACTURING: New orders for U.S.-made goods fell in April and shipments dropped by the most in two years, indicating continued weakness in manufacturing activity that could undercut the broader economy.

* RARE EARTHS: China’ state planner said the country will consider strengthening controls on exports of rare earths, while the U.S. Commerce Department urged steps to boost domestic output of rare earths and other critical minerals to reduce reliance from foreign sources.

* CHINA LITHIUM: An estimated 5 million tonnes of lithium deposits have been found in China’s Yunnan province, scientists said, potentially curbing the nation’s reliance on imports of the material used in electric vehicle batteries.

* PANAMA COPPER: Panamanian President-elect Laurentino Cortizo said his government would review a copper mining contract awarded to a subsidiary of Canada’s First Quantum Minerals, casting uncertainty around the project.

* NORSK HYDRO: Norsk Hydro’s Alunorte plant, the world’s biggest alumina refinery, is expected to reach 75-85% of full capacity in next 2 months, its chief executive said.

* For the top stories in metals and other news, click or

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 = 6.9088 Chinese yuan renminbi)

Reporting by Mai Nguyen; editing by Gopakumar Warrier and Rashmi Aich

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