Copper eases but holds near two-week highs as tight China supply offers support
XLB•Copper fell 0.31% to $14,432.50 a metric ton but remained near a two-week high, supported by tight Chinese supply. The Yangshan premium reached $205 a ton, its highest in more than a decade, while expectations of another U.S. rate hike limited gains.
1. Tight Chinese supply
Three-month copper on the London Metal Exchange fell 0.31% to $14,432.50 a metric ton, after reaching $14,517 on Wednesday. The most-traded Shanghai Futures Exchange copper contract slipped 0.25% to 109,560 yuan a ton. The Yangshan copper premium rose to $205 a ton, its highest in more than a decade, and the domestic premium climbed to 1,085 yuan a ton. Shanghai exchange-monitored copper stocks fell more than 26% last week.
2. Rate outlook weighs
Expectations of further U.S. interest rate hikes remained a potential headwind. The Federal Reserve held its benchmark rate in a 10-2 vote, with two policymakers favoring a quarter-point increase, and markets continued to price in another hike in December.
