Reports that workers at Antofagasta’s Los Pelambres copper mine in Chile may possibly receive a new wage offer in coming days have eased concerns that workers would strike and disrupt output at the Chilean mine, ANZ Research said on Monday morning.
Earlier in March, union workers at the Antofagasta mine had voted to strike after rejecting a contract offer, setting off government mediation talks.
In addition, a slightly stronger dollar - boosted by strong US economic data late last week - affected investors’ appetite for the base metals, while a cautious mood ahead of the US Federal Open Market Committee’s (FOMC) monetary policy meeting on Wednesday has also pushed base metal prices lower this morning, ANZ added.
The US central bank is widely expected to raise its policy rate by 25 basis point, taking the Federal Funds target rate to 1.5-1.75%. Investors will also look to the FOMC statement for more clarity on the number of rate increases expected this year.
SHFE copper stocks continued to climb last Friday. Inventories increased 10.8% week on week to 296,994 tonnes as of March 16, which is up by 85% since the beginning of this year.
Supply in the refined copper market is ample in the short term, but with downstream capacity restarts and expectations of stronger demand during the upcoming peak season for demand, tightness in the copper raw material market could arise, providing support for copper prices, Minmetals Jingyi Futures said last Friday.
Rest of metals decline
- The SHFE May zinc contract fell 25 yuan to 24,885 yuan per tonne.
- The SHFE May aluminium contract dipped 60 yuan to 13,935 yuan per tonne.
- The SHFE May lead contract price decreased 115 yuan to 18,435 yuan per tonne.
- The SHFE July nickel contract slipped 1,640 yuan 102,070 yuan per tonne.
- The SHFE May tin contract price eased 110 yuan to 144,610 yuan per tonne.
Currency moves and data releases
- The dollar index rose 0.09% to 90.28 as of 10.52am Shanghai time. The index reached as high as 90.38 on March 16, the highest since March 1.
- In other commodities, the Brent crude oil spot price fell by 0.38% to $65.85 per barrel as of 10.54am Shanghai time.
- In equities, the Shanghai Composite edged up by 0.03% to 3,270.99 as of 10.55am Shanghai time.
- Most US data released last Friday surprised on the upside. The capacity utilization rate in February was at 78.1%, above expectations of 77.7%, while February industrial production grew 1.1%, besting forecast of a 0.3% growth.
- The March preliminary University of Michigan consumer sentiment read 102, beating expectations of 99.2, while the January Jolts job openings was at 6.31 million, higher than forecast of 5.91 million.
- Building permits was at 1.3 million in February, close to expectations of 1.32 million, but February housing starts disappointed at 1.24 million - 1.29 million was called for.
- It is a quiet day for the economic agenda with mainly the European Union’s trade balance of note, while the G20 meetings will kick off in Argentina today.
|SHFE snapshot at 10.57am Shanghai time|
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|LME snapshot at 02.58am London time|
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|Changjiang spot snapshot on March 19|
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