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The most-traded SHFE June copper contract was at 50,910 yuan ($7,998) per tonne as at 11.14 am Shanghai time, down by 280 yuan per tonne from the previous day’s closing price. Close to 109,000 lots of the contract have been traded so far.
The dollar index hit as high as 92.84 on Wednesday – the highest since December 27, 2017 – after the market digested the US Federal Open Market Committee’s (FOMC) post-monetary policy meeting statement. As widely expected, the Federal Reserve left its benchmark rate range unchanged at 1.5-1.75%.
“The key take away is that in spite of the recent inflation uplift the Fed is happy to stay the course and doesn’t yet see the need to accelerate the pace of rate hikes,” National Australia Bank said on Thursday.
The post-meeting statement revealed a Fed more confident that inflation will recover, which sees a continued strengthening of the labor market, with economic activity remaining at a ‘moderate rate’, the bank said.
“The Fed remains on course to at least deliver two more rate hikes this year – a June hike is almost fully priced and another one also essentially fully priced for December – with the risk of adding one more if there is evidence of more inflationary pressures,” the bank added.
SHFE aluminium prices followed overnight gains on the London Metal Exchange whereby the LME three-month aluminium price closed a 2.6% higher on Wednesday, with LME warrant cancellations providing support – more than 50,000 tonnes of fresh cancellations have taken place across Asia this week.
Global aluminium prices continued to remain volatile amid US sanction- and trade policy-related developments.
On Tuesday, the US Treasury gave investors an additional month to divest or transfer their holdings in sanctioned Russian companies including aluminium producer UC Rusal. The US has also postponed imposing Section 232 tariffs on aluminium and steel imported from the European Union, Canada and Mexico until June 1, from the initial deadline of May 1.
Trade will remain in focus with senior US officials arriving in Beijing to start trade negotiations with their Chinese counterparts on Thursday and Friday.
The US had threatened to impose import tariffs of 25% on a list of 1,300 items produced by China – among them aluminium and aluminium products, while China has threatened a 25% import tax on $50 billion worth of US-origin products including soy beans, automotives, chemicals and airplanes.
Rest of the complex down, except aluminium
Currency moves and data releases