METALS-Copper edges higher ahead of Fed chair's testimony
(Updates throughout, moves dateline from HANOI)
LONDON, June 22 (Reuters) – Copper prices edged up from 10-week lows on Tuesday as investors wait to see if Federal Reserve chair Jerome Powell will give guidance on the pace of U.S. monetary tightening in testimony to Congress beginning at 1800 GMT.
Signals from the Fed that it would start raising interest rates sooner than expected sent prices of riskier assets like equities and metals tumbling last week.
They also boosted the dollar, making metals costlier for buyers outside the United States.
Benchmark copper on the London Metal Exchange (LME) reached a record high of $10,747.50 a tonne in May but fell 8.6% last week and touched a low of $9,011 a tonne on Monday.
At 1115 GMT it was up 0.4% at $9,212 a tonne.
“We’re seeing a healthy correction,” said Saxo Bank analyst Ole Hansen. The uptrend at around $8,700 provided technical support and “underlying fundamentals still point to higher prices,” he said.
MARKETS: World shares edged higher and the dollar was slightly stronger after Powell on Monday said he regards the current jump in inflation as likely to fade, easing fears of rapid interest rate rises.
YUAN: In China, the biggest metals consumer, the yuan fell to its weakest against the dollar since early May.
JPMORGAN: “Copper prices have peaked in 2Q and will ease into the second half of the year as the recent demand recovery moderates and supply improves. We maintain our year-end target price of $7,550,” analysts at JPMorgan said in a note.
“China’s domestic market shows every sign of a glut,” they said.
SUPPLY: Glencore said it will restart operations at the Mutanda copper and cobalt mine in Democratic Republic of Congo and return to production in 2022.
SURPLUS/DEFICIT: The copper market was in deficit in March, while in April the nickel and zinc markets were in deficit and lead was oversupplied, study groups tracking supply and demand said.
PRICES: LME aluminium was up 0.1% at $2,406 a tonne, zinc was 0.3% higher at $2,846, nickel rose 1.7% to $17,740, lead gained 0.4% to $2,164.50 and tin was down 0.1% at $30,040.
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