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METALS-Copper slips on profit taking ahead of Fed meeting

· 03/16/2021 07:41
METALS-Copper slips on profit taking ahead of Fed meeting

Updates with official prices, Chile news

By Eric Onstad

- Copper prices slumped on Tuesday as investors shed some of their bullish positions amid uncertainty before central bank meetings.

Benchmark copper CMCU3 on the London Metal Exchange dropped 2.1% to $8,956.50 a tonne in official trading.

Copper hit a 9-1/2 year peak last month of $9,617, having surged by 24% since the start of the year.

"There's lots of positive news already priced in, lots of positive expectations about electric vehicles. It's quite natural for some of the smart money to take profits or stay on the sidelines," said Xiao Fu, head of commodity market strategy at Bank of China International.

The U.S. central bank's two-day policy meeting concludes on Wednesday amid worries about inflation, driving U.S. 10-year borrowing costs to the highest in more than a year.

"Global central banks still have an easing bias, although the market is very worried about inflationary prospects, so you have this discrepancy and that introduces uncertainty," Fu said.

* A union of workers at Antofagasta's ANTO.L Los Pelambres mine in Chile will agree to extend government-mediated labour talks into next week in a bid to ward off a strike at the sprawling copper deposit, a union leader said. nL1N2LE126

* LME copper inventories MCUSTX-TOTAL rose to a two-month high, having gained 41% over the past two weeks.

* Aluminium on the Shanghai Futures Exchange SAFcv1 hit a 9-1/2-year high as supply concerns rose after an aluminium hub in top consumer China ordered power cuts and output curbs. nL1N2LD0SY

CRU analyst Wan Ling said shutdowns in Inner Mongolia, a major aluminium producing region, could translate to a 100,000-tonne annual aluminium output reduction.

On the LME, three-month aluminium CMAL3 gave up 0.8% to $2,201 a tonne.

* LME nickel CMNI3 dipped 0.2% in official activity to $16,181 a tonne, zinc CMZN3 fell 1.3% to $2,822.50, lead CMPB3 added 0.1% to $1,965.50 and tin CMSN3 shed 0.4% to $25,220.

* For the top stories in metals and other news, click TOP/MTL or MET/L

(Additional reporting by Mai Nguyen in Hanoi. Editing by Mark Potter; Editing by Edmund Blair)

((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

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