Copper slips to 3-month low ahead of Fed policy statement

LONDON, March 21 (Reuters) – Copper slid to three-month lows on Wednesday along with zinc and aluminium as expectations for another U.S. interest rate hike and worries over the prospect of a global trade war stoked concerns over the demand outlook for industrial metals. Copper, chiefly used in construction, is down for a fifth session on the London Metal Exchange, ahead of the Federal Reserve’s decision on U.S. interest rates later. Markets are expecting the Fed to announce a quarter-point hike after European markets close, but are awaiting guidance on whether three or four are planned for 2018 as a whole. “(We believe) there will be a rate hike in the short term, and of course that’s not positive for base metals,” ABN Amro analyst Casper Burgering said. “It’s really macroeconomic events that are giving prices direction. We will have to wait for some good fundamental news before we see prices increase again.” Traders are also bracing for further news from the United States on trade, with U.S. President Donald Trump expected to announce up to $60 billion in new tariffs on Chinese imports by the end of the week. * LME COPPER: Three-month copper on the London Metal Exchange was down 0.6 percent in official midday trading at $6,712 a tonne, having earlier touched a three-month low of $6,702. * FINANCIAL MARKETS: European stocks eased and the dollar retreated from three-week highs as investors marked time before a likely hike in U.S. interest rates. * COPPER SURPLUS: The global world refined copper market showed a 17,000 tonnes surplus in December, compared with a 41,000 tonnes deficit in November, the International Copper Study Group said in its monthly bulletin. * LOS PELAMBRES: Workers at Antofagasta PLC’s Los Pelambres copper mine in Chile have opted to extend a period of government mediation in an effort to reach agreement on a new labour contract, an industry group said. * ALUMINIUM PRICES: LME aluminium slid to its lowest since mid-December at $2,062.50 a tonne. Untraded in official rings, it was last bid at $2,078 a tonne, up 0.1 percent. * ALUMINIUM: Global primary aluminium output excluding China dipped to 2.009 million tonnes in February from a revised 2.221 million tonnes in January, International Aluminium Institute (IAI) data showed on Tuesday. * OTHER METALS: Nickel was down 0.9 percent at $13,325 a tonne in official trading. The other base metals were untraded in official rings. LME zinc was last bid up 0.7 percent at $3,225 a tonne, off an earlier three-month low of $3,183, while lead was 1 percent higher at $2,375 a tonne and tin was down 0.1 percent at $20,650.