Industrial Metals Price Watch: Copper Price Rises ahead of Fed Meeting

on Jun 17, 2013

Copper for delivery in three months rose in the morning trading session on the London Metal Exchange today, June 17, extending the metal’s advance from Friday. The copper price was up 0.4 percent at $7,121 a metric ton as at 9:48 in London, while copper for July delivery added 0.4 percent on the Comex in New York to $3.213 a pound.

The aluminium price for delivery in three months fell 0.2 percent $1,847.25 a ton on the LME in the morning,
heading for an eighth daily drop in a row. At the same time two buyers in Japan, the biggest consumer of the metal in Asia, agreed to keep premiums paid to producers steady in the third quarter at $249 a ton over the price of aluminium for immediate delivery in London.

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**Fed meeting**
The focus of the market today was on the upcoming two-day meeting of the Federal Open Market Committee (FOMC) starting tomorrow, which is expected to give indications whether the U.S. central bank will reduce the pace of its bond-buying programme. Analysts surveyed by Bloomberg have forecast that the Fed will reduce monthly debt-buying aimed at stimulating the US economy to $65 billion from $85 billion in October.

The U.S. economy appears to be on the path to recovery as retail sales were better than expected last month, while factory production rebounded from two months of declines.
“From a macro perspective, the market focus will be on the upcoming FOMC meeting, where participants will seek clarity on the aggressive monetary easing stance taken in the U.S.,” George Adcock, an analyst at London-based Marex Spectron Group, has said as quoted by Bloomberg.

!m[Aluminium Extends Fall in London](/uploads/story/3141/thumbs/pic1_inline.png)
He has also said that according to the company, a reduction in the quantitative easing was “highly unlikely for the foreseeable future”. Yet, Adcock has pointed out that “the mere discussion of it can severely dent investor sentiment and psychology”
**Bearish market**
“The market remains heavily short and the potential for a further short-covering rally remains elevated,” Adcock has added.
Among the other base metals on the LME, lead rose, while tin, zinc and nickel declined today.


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