(Adds comment, detail; updates prices)
London copper fell on Wednesday after credit ratings agency Moody's downgraded China due to its massive debt, with muted trade expected ahead of the release later in the session of minutes from the Federal Reserve's last meeting.
"After a set of less-than-positive U.S. data, a debt (agency) downgrading China, Noble struggling ... and the banks reporting a 29-percent drop in commodities revenue, the markets were always going to struggle and struggle they are," said Kingdom Futures in a report.
FUNDAMENTALS
- LME COPPER: London Metal Exchange copper CMCU3 was down 0.7 percent at $5,671.50 a tonne as of 0700 GMT, after closing slightly higher in the previous session. Prices have fallen from near two-year peaks above $6,200 in February to a $5,480-$5,720 range since early May after the rally sparked a flood of scrap supply.
- SHFE COPPER: Shanghai Futures Exchange copper SCFcv1 edged down as much as 0.4 percent to 45,780 yuan ($6,645) a tonne.
- NICKEL: Nickel was particularly hard hit, falling by 1.7 percent in London CMNI3 and 2.3 percent in Shanghai SNIcv1, dragged down by losses in steel and after China trade data showed a surge in ore imports from the Philippines.
- CHINA: Moody's Investors Service downgraded China's credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.
- FED: Immediate market focus was on the minutes of the Fed's latest policy-setting meeting, set for publication at 1800 GMT on Wednesday. The market already expects the Fed to hike interest rates in June, but given the greenback's recent weakness, dollar bulls are expected to welcome any hawkish hints by the central bank.
- U.S. PROPERTY: New U.S. single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labour market.
- BANKS: Commodities-related revenue at the 12 biggest investment banks plunged 29 percent year-on-year in the first quarter of 2017 to its lowest in more than a decade, mainly due to weakness in the energy sector, a consultancy said on Wednesday.
- NOBLE: Struggling commodity trader Noble Group Ltd
said on Wednesday it was still in discussions with various potential strategic parties as it sought to regain market confidence, but its shares fell 11 percent in early trade. - China's imports of refined copper in April slid by 41 percent from a year ago, trade data showed on Tuesday, as traders found their buying power crimped by tighter access to credit.
- MARKETS: Asian shares edged lower in early trade on Wednesday, while the Australian dollar and the offshore Chinese yuan slipped after Moody's cut China's credit rating. [MKTS/GLOB]
- COMING UP: Fed releases minutes of May 2-3 meeting at 1800 GMT BASE METALS PRICES 0713 GMT Three month LME copper CMCU3 5649 Most active ShFE copper SCFcv1 45770 Three month LME aluminium CMAL3 1937.5 Most active ShFE aluminium SAFcv1 13985 Three month LME zinc CMZN3 2635.5 Most active ShFE zinc SZNcv1 22380 Three month LME lead CMPB3 2090.5 Most active ShFE lead SPBcv1 15905 Three month LME nickel CMNI3 9165 Most active ShFE nickel SNIcv1 76260 Three month LME tin CMSN3 20315 Most active ShFE tin SSNcv1 144270 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 308.17 LME/SHFE ALUMINIUM LMESHFALc3 -1564.09 LME/SHFE ZINC LMESHFZNc3 402.86 LME/SHFE LEAD LMESHFPBc3 -1395.76 LME/SHFE NICKEL LMESHFNIc3 1333.66
($1 = 6.8891 Chinese yuan renminbi)
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