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Copper prices clambered higher on Wednesday as investors bet that the U.S. central bank would not raise rates too quickly, allowing economic growth and metals demand to keep growing.
Three-month copper on the London Metal Exchange CMCU3 had gained 1.3% to $9,929 a tonne by 1115 GMT, building on its 0.8% rise in the previous session.
The U.S. Federal Reserve is expected on Wednesday to signal plans to raise interest rates in March as it focuses on fighting inflation.
“The mood on markets has changed overnight and I think it’s because most market players think the Fed will deliver this evening, but will not over-deliver,” said analyst Daniel Briesemann at Commerzbank in Frankfurt.
“If the Fed acts in a moderate manner, the economy will still continue recovering from its COVID low in 2020, and this supports metals demand in general.”
The upbeat mood lifted equity markets, while oil rose back towards recent seven-year highs on tension between Russia and Ukraine. MKTS/GLOB
In China, the most-traded copper contract on the Shanghai Futures Exchange SCFcv1 finished up 1.3% at 70,730 yuan ($11,192.16) a tonne.
* Signs of near-term physical demand in China however were not as rosy. The Yangshan copper premium SMM-CUYP-CN was last at $62 a tonne, the lowest since August last year and down from $88 a month ago.
* LME aluminium CMAL3 slipped 0.3% to $3,083 a tonne, pausing after climbing by 2.1% on Tuesday on worries that Russia-Ukraine tension would hit supply.
* LME zinc CMZN3 advanced 1% to $3,606.50 a tonne, lead CMPB3 edged up 0.1% to $2,336, nickel CMNI3 climbed 1.2% to $22,610 and tin CMSN3 gained 2% to $42,150.