BASE METALS: Shanghai Metals Mostly Down As Equities Fall

Base metals on the Shanghai Futures Exchange were mostly lower Wednesday as equities markets declined due to a resurfacing of concerns about further monetary tightening.

Benchmark SHFE July copper settled 1.1% lower at CNY68,370 a metric ton.

The dollar's rebound against its major rivals during Asian hours weighed on dollar-denominated metals on the London Metal Exchange, as it made them more expensive for buyers using other currencies, and that set the tone for SHFE metals.

Around 0520 GMT, the euro was at $1.4807, down from $1.4825 as Asian trading opened.

Copper was put under more pressure as Chinese shares fell as much as 2% in the afternoon session, after the People's Bank of China said in its quarterly monetary policy report that stabilizing prices and inflation expectations are its current priority, and that it would make good use of a variety of tools including open market operations, reserve ratios and interest rates to manage excess liquidity.

"Concerns over the macroeconomic front are always a blow to commodities, as once the [broader] environment changes, there'll be a significant difference and that's not something supply-and-demand fundamentals can alter," said Yong An Futures analyst Wu Jianjian.

"I think the recent correction in metals prices was mainly due to worries that tightening measures may crimp economic growth and thus demand for industrial metals," Wu said.

Analysts said copper may stay within recent ranges over the next few sessions, as investors will be watching the dollar's movements after the European Central Bank policy meeting Thursday.

Copper traded at the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, was quoted at CNY70,000-CNY70,200/ton, down from CNY70,400-CNY70,500/ton Tuesday.

Three-month LME copper ended Tuesday's afternoon kerb $30 higher at $9,350/ton.

It was quoted 1.6% lower at $9,200/ton when the SHFE closed at 0700 GMT Tuesday.

SHFE zinc settled unchanged, while aluminum ended marginally higher and lead lost 0.3%.

Wednesday's settlement prices in yuan a metric ton and LME late kerb prices from Tuesday in dollars a ton: