Reuters reported that copper traded largely steady as investors waited for the result of a European Central Bank meeting at which interest rates are expected to be cut to a record low, a move which may stimulate economic growth and help boost metals demand.
Three month copper on the London Metal Exchange shed 0.1% to USD 7,714.50 per tonne by 12. 21 aq.m. EDT after falling 1.2% in the prior session. The most active October copper contract on the Shanghai Futures Exchange eased 0.1% to CNY 55,910 per tonne snapping five sessions of gains.
Qingdao based copper buyer said that copper prices have moved very little around USD 100 or CNY 500 over the past few sessions. Investors will stay cautious until they get more trading cues from today's ECB rate meeting and tomorrow's US nonfarm payrolls data.
The ECB is expected to cut interest rates later on Thursday after surveys showing all of Europe's biggest economies are in recession or heading there and little sign things will improve soon.
A rate cut by the ECB would back up an EU summit deal to strengthen the region's financial system and help avert a break up of the euro zone. The deal which appears tenuous, had helped boost metal prices earlier this week to multi week highs.
Investors are also eyeing Friday's key monthly US jobs report for clues over whether the Federal Reserve will take additional easing steps. Non farm payrolls were expected to see an addition of 90,000 workers in June, with the unemployment rate holding steady at 8.2%.
Metals prices are seeing support from hopes that China, the world's largest consumer of industrial metals, would embark on fresh stimulus measures to boost flagging economy growth.
A slew of weak data from China, including a private sector survey which showed services firms grew at their slowest rate in 10 months in June, easing back from May's 19 month peak, was seen by investors as a precursor to stimulus measures.
Shanghai aluminum was one of the session's best performers with the most active Shanghai contact recovering 5.2% by its midday close from a three year low it posted last week as Chinese traders reported renewed interest in the metal, believing it was oversold in recent price dips.
A metals buyer said that despite problems of overcapacity in China, aluminum looks one of the most attractive to traders now among the industrial metals at these low price levels. It has a lot of uses, which makes it less vulnerable than metals like zinc in times of a downturn in any one sector. Its energy intensive nature also means it will be bolstered by crude oil price rises should potential supply problems flare up.
