Copper dips as rate hike bets weigh on demand hopes
CPER•Other base metals mostly weaken
Aluminium was down by 0.35% on the LME CMAL3 and stable on the SHFE SAFcv1. Stocks have been battered by disrupted supply from the Middle East, and total stocks in LME-registered warehouses MALSTX-TOTAL fell to their lowest on record since 1998.
Among other LME metals, zinc CMZN3 lost 0.43%, lead CMPB3 added 0.21%, nickel CMNI3 dipped 0.16% and tin CMSN3 dropped 1.71%.
Elsewhere on SHFE, zinc SZNcv1 lost 0.5%, lead SPBcv1 added 0.35%, nickel SNIcv1 lost 0.77% and tin SSNcv1 dropped 1.5%.
($1 = 6.7679 Chinese yuan renminbi)
Copper edges lower as Fed bets weigh on demand
Copper prices edged lower on Tuesday, weighed by lingering bets of a U.S. interest rate hike threatened to dampen demand, even as crude oil prices declined as investors assessed a pause in U.S. strikes on Iran.
Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.5% at $13,664 a metric ton by 0300 GMT.
The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 dipped 0.14% at 104,800 yuan ($15,484.86) a ton.
The market is awaiting the outcome of the U.S. Federal Reserve meeting, due on Wednesday, and weighing the impact of relief to oil prices after a lull in fighting between the U.S. and Iran.
"Easing tensions between the United States and Iran have pushed crude oil prices lower, but expectations of further Federal Reserve rate hikes have risen," analysts from Chinese broker Galaxy Futures said.
Expectations that the Fed will hold interest rates steady stand at 62%, while 38% of market participants expect at least a 25 basis points hike, up from 16% a week earlier, according to CME FedWatch.
The copper market is worried that higher rates could weigh on demand by dampening economic activity. The red metal has benefited from expectations of rising demand from AI infrastructure, electrification and electric vehicles.
