2 days ago
Copper Slips as Hot US Inflation Revives Fed Rate-Hike Bets
Copper prices moved slightly lower after new US inflation data came in hotter than expected.
This made traders think the Federal Reserve might raise interest rates.
Higher interest rates can make metals less attractive because they do not pay interest.
A stronger US dollar also pressured copper and other metals.
Copper had recently reached a record high because traders expected possible tariffs on refined copper.
Some traders shipped copper to the United States early, hoping prices there would rise.
Demand from data centers and renewable energy also supported copper prices.
However, signs of easing supply tightness are now limiting the price rise.
Analysts said copper may move unevenly until stronger buying or a new market catalyst appears.
LME copper fell as much as 0.6% after hotter-than-expected US inflation increased rate-hike expectations.
Copper was down 0.3% at $14,193 a ton by 10:05 a.m. Singapore time.
A stronger dollar and broader pressure on risk assets pushed most major metals lower.
The spot copper premium over three-month futures narrowed to $4.50 a ton, suggesting easing supply tightness.
Copper had reached a record high last week on tariff expectations, data-center and renewable-energy demand, and mine supply setbacks.
- Who
- Copper traders, the Federal Reserve, and metals-market participants.
- What
- Copper prices declined as stronger US inflation increased expectations of a Federal Reserve rate hike.
- Where
- The London Metal Exchange and broader global metals markets, with trading impacts linked to the United States.
- When
- Monday, after Friday’s inflation report; the Federal Reserve’s meeting is this week.
- Why
- Hotter inflation, a stronger dollar, and pressure on risk assets weighed on metals, while easing supply tightness also affected copper.
Key facts
- Copper price
- LME copper declined 0.3% to $14,193 a ton by 10:05 a.m. Singapore time.
- Intraday move
- Copper futures fell as much as 0.6%.
- Spot premium
- The premium for spot copper over three-month futures was $4.50 a ton.
- Other metals
- Zinc fell 0.7%, aluminum was flat, and iron ore dropped 0.4% to $97 a ton.
- Rate expectations
- Traders increased bets on a Federal Reserve rate hike following Friday’s inflation data.
- Recent record
- Copper reached a record high the previous week.
Quotes
Sucden Financial Ltd. analysts
Analysts at the financial services firm Sucden Financial Ltd.
“With speculative length reduced but prompt tightness also easing, copper is likely to remain choppy around current levels until stronger dip-buying returns or a fresh macro or fundamental catalyst provides clearer direction.”
CNBC TV 18
Sources
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