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Movements in the SHFE base metals were fairly limited but prices were generally down due to persisting negative sentiment following an escalation in trade tensions between the United States and China earlier this week.
The exceptions to the weakness were nickel and copper, which managed to eke out marginal gains, with the lingering US-Sino trade dispute capping any significant gains.
The most-traded November copper contract on the SHFE stood at 50,480 yuan ($7,349) per tonne as at 10.36am Shanghai time, up by 0.2% or 120 yuan per tonne from Tuesday’s close.
The red metal is likely finding support from an easier dollar, which has drifted lower ahead of today’s FOMC meeting. An interest rate increase is widely expected, but investors will be scrutinizing the accompanying statement for any language which could dictate short-term movement in the dollar.
The dollar index was little changed at 94.15 as at as at 10.35am Shanghai time, though this is down from 94.35 at roughly the same time on Tuesday.
“While markets have priced in a further 25 basis point rate hike at Wednesday’s US Federal Open Market Committee meeting, the central bank’s forward-looking guidance could prove a significant risk event if the Federal Reserve adopts a more hawkish stance,” Metal Bulletin analyst James Moore said.
“The tone of the accompanying monetary policy statement will have implications for the dollar, risk appetite and, therefore, the copper price to a certain extent,” Metal Bulletin analyst Boris Mikanikrezai added.
As such, most investors seem content to watch and wait before making their next move, leaving the other SHFE base metals in consolidation mode.
Base metals prices
Currency moves and data releases