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METALS-London copper prices drift lower on U.S. rate hike view
February 23, 2017 / 3:36 AM / 10 months ago

METALS-London copper prices drift lower on U.S. rate hike view

* Firmer dollar weighs on LME metals complex

* Copper market seen in 9,000 T deficit in Nov 2016 -ICSG

* Coming Up: Germany Detailed GDP Q4 at 0700 GMT (Adds comment, detail, updates prices)

By Melanie Burton

MELBOURNE, Feb 23 (Reuters) - London copper prices drifted lower on Thursday, with the U.S. dollar firming as the market reassessed minutes from the Federal Reserve’s last policy meeting that kept the prospect of a March rate hike in play.

Many Fed policymakers said it may be appropriate to raise interest rates again “fairly soon” should jobs and inflation data come in line with expectations, according to the policy meeting minutes released on Wednesday.

The dollar moved away from overnight lows and steadied on Thursday. A stronger dollar erodes purchasing power for those paying for commodities with other currencies.

Three-month copper on the London Metal Exchange had slipped 0.6 percent to $6,004 a tonne by 0330 GMT, after easing 0.3 percent on Wednesday.

Prices have been bouncing around the $5,960-$6,200 a tonne range since mid-month, touching a 20-month top of $6,204 on Feb. 13 after a strike was announced at Chile’s Escondida mine, the world’s biggest copper producer.

Shanghai Futures Exchange copper eased 0.3 percent to 48,760 yuan ($7,089) a tonne.

Other LME metals, LME zinc nickel and aluminium also fell around half a percent.

Fuelling concerns about supply, BHP Billiton’s decision this week to give up its legal right to replace striking workers at Escondida is aimed at sacrificing some output to undermine the union’s position, analysts said.

The global world refined copper market showed a 9,000 tonne deficit in November, compared with a 49,000 tonne surplus in October, the International Copper Study Group (ICSG) said in its latest monthly bulletin.

Citi bank said earlier this week it now expected a deficit in the global copper market for the first year in six.

China’s home price growth slowed for the fourth straight month as demand cooled in its biggest cities, a welcome sign for policymakers as they seek to defuse bubbles in the world’s second-largest economy amid explosive debt growth. “Overall, we think China’s cooling measures to deflate property bubbles have taken effect,” said Argonaut Securities in a report. “A steady growth in property market with moderate price growth is positive for overall economic conditions and stabilizes underlying demand for commodity and related materials, in our view,” Argonaut said.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.8778 Chinese yuan Reporting by Melanie Burton; Editing by Joseph Radford and Tom Hogue

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