London 21/09/2016 - Base metals traded inconclusively on the LME on Wednesday, with investor hesitation evident ahead of the conclusion of the US monetary policy meeting later today, traders said.
Prices were mixed, having opted for tight ranges after the run-up in some in the previous session. Most market participants still do not anticipate an interest-rate rise from the Federal Reserve in September so the metals' price reaction on Thursday may well be limited.
"Most of the [global] economies are nothing to get excited about so the chances of a surprise from the Fed are quite slim. It looks like the metals will be reacting to their own situations and outlooks for the next few days," a trader said.
Earlier, the Bank of Japan shifted its strategy. Although it kept interest rates unchanged, the Japanese central bank said it would switch from bond-buying to targeting long-term interest rates.
There was a lack of macroeconomic data today as well - the only release of significance was China's August leading index, which rose 0.9 percent from the previous month.
In the metals complex, copper, which briefly hit a four-week high of $4,800 yesterday, was compressed within a $35 range, closing broadly in mid-range at $4,763 per tonne, down $30. Warehouse stocks fell a net 150 tonnes to 347,800 tonnes; arrivals in New Orleans, Panama City and Port Klang were offset by declines in Singapore and Gwangyang.
In trade data, Chinese imports of unwrought copper and copper alloy rose 1.5 percent year-on-year but fell 3.2 percent month-on-month to 300,000 tonnes in August, according to the country's General Administration of Customs.
The metal also largely ignored a report from the International Copper Study Group showing the global refined copper industry was in a production deficit of around 306,000 tonnes in the first half, which equates to a seasonally adjusted deficit of about 227,000 tonnes.
Additionally, the World Bureau of Metal Statistics (WBMS) said the copper market was undersupplied by 151,000 tonnes in the January-July period.
In others, aluminium finished $8 higher at $1,584 after stocks fell 6,600 tonnes to 2,161,575 tonnes and cancelled warrants were up 450 tonnes at 862,150 tonnes. The WBMS said the market deficit expanded to 513,000 tonnes in January-July from a deficit of 331,000 tonnes recorded for the whole of last year
Nickel held above $10,000, closing $25 higher at $10,335, after seeing supportive inventory moves - stocks fell 1,002 tonnes to 364,782 tonnes and cancellations rose 294 tonnes to 114,942 tonnes, with 1,296 tonnes of freshly cancelled warrants in Kaohsiung.
Zinc had closed strongly at $2,300 yesterday but failed to hold at this level, ending today at $2,272, down $28. Stocks and cancelled warrants both dipped 250 tonnes to 444,150 tonnes and 23,350 tonnes respectively.
Lead, which set a 16-month high of $1,988 on Tuesday, was more subdued today, finishing at $1,936, down $41 - stocks fell five tonnes to 3,745 tonnes. Tin ended at $19,375, down $17, but stocks continued to slide, edging five tonnes lower to 3,745 tonnes.
Steel billet was indicated at $300/325, cobalt at $26,750/27,250 and molybdenum at $14,650.15,150. The LME no longer holds any tonnages of molybdenum after yesterday's withdrawals and open interest is zero.
(Additional reporting by Kathleen Retourne, editing by Mark Shaw)