SHANGHAI (Dow Jones)--Base metals on the Shanghai Futures Exchange settled higher Wednesday, although copper gave up most of its early gains as Chinese equities markets declined due to concerns about market liquidity moving to an international trading platform that is being planned.
Benchmark SHFE July copper settled 0.2% higher at CNY69,970 a metric ton after dipping as low as CNY69,450/ton.
Copper was initially bid up as some investors saw lower prices as a buying opportunity, but most participants stayed on the sidelines ahead of the U.S. Federal Reserve Open Market Committee meeting that ends later Wednesday, which is expected to shed light on whether and when the Fed might raise interest rates hikes and on the timeline of the its quantitative easing program, analysts said.
The red metal was later battered by broad concern that domestic markets may lose liquidity as investors funnel their money to an international board that the Shanghai Stock Exchange will launch an international board soon, based on local media reports.
That said, "the main tone hasn't changed in that copper is still in broad consolidation these days...participants are just waiting for clear and directional cues, possibly from the Fed meeting," Shanghai Cifco Futures analyst Fang Junfeng said.
Copper traded at the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, was quoted at CNY70,900-CNY71,000/ton, up from CNY70,600-CNY70,650/ton Tuesday.
Three-month London Metal Exchange copper ended Tuesday's afternoon kerb down $156 at $9,544/ton.
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Read more: http://online.wsj.com/article/BT-CO-20110427-704493.html
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