BLBG:Copper Gains as Aluminum Rises First Time in Eight Days
Copper rose for a second day in London as investors awaited a meeting of Federal Reserve policy makers that may give clues to whether the central bank will vary the pace of asset purchases.
The Federal Open Market Committee meets June 18-19. The Fed will reduce monthly debt-buying aimed at stimulating the U.S. economy, the world’s biggest, to $65 billion from $85 billion in October, according to economists surveyed by Bloomberg News. Retail sales rose more than forecast and factory output rebounded from two months of declines, reports showed last week.
“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 Marex Spectron Group in London, said by e-mail today.
Copper for delivery in three months gained 0.4 percent to $7,121 a metric ton by 9:48 a.m. on the London Metal Exchange. Copper for delivery in July rose 0.4 percent to $3.213 a pound on the Comex in New York.
“We stand by our assertion that a reduction in QE is highly unlikely for the foreseeable future,” Adcock said, referring to Fed debt purchases, known as quantitative easing. “However, the mere discussion of it can severely dent investor sentiment and psychology.”
Money managers almost tripled their net-short position, or wagers on falling copper prices, to 18,722 Comex futures and options contracts as of June 11 from 6,626 a week earlier, according to the U.S. Commodity Futures Trading Commission.
“The market remains heavily short and the potential for a further short-covering rally remains elevated,” Adcock said.
Aluminum for delivery in three months fell 0.2 percent to $1,847.25 a ton in London, heading for an eighth drop in a row. Two buyers in Japan, Asia’s biggest importer of the lightweight metal, agreed to keep premiums paid to producers steady in the third quarter at $249 a ton over the price of aluminum for immediate delivery on the LME.
Nickel, tin and zinc slid in London. Lead gained.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
