Copper sinks to three-week low as dollar firms, LME stocks rise
XLB•Other base metals also weaken
Sentiment in metals was broadly weak. Aluminium CMAL3 fell 0.3% to $3,242 a ton, zinc CMZN3 slid 2.1% to $3,798, also touching a three-week low, while lead CMPB3 lost 0.6% to $1,880.50, hitting its weakest since August 3.
Nickel CMNI3 shed 0.7% to $16,350, notching a two-month low, while tin CMSN3 fell 2.4% to $52, touching its lowest since July 17.
LME inventories rise as cash discount widens
Meanwhile, LME copper inventories MCUSTX-TOTAL increased thanks to 9,600 tons of inflows, of which 4,550 tons were in warehouses in Italy.
The discount of the cash LME copper contract to the three-month forward CMCU0-3 widened to $39.25 a ton from roughly $10 on Friday, signalling easing near-term tightness.
Fed meeting and tariff uncertainty weigh on sentiment
"Copper has led the decline and now looks to be challenging recent lows, extending the cautious tone following the first weekly loss since June," Neil Welsh, head of metals at Britannia Global Markets, wrote in a note, adding that concerns over tighter U.S. monetary policy were weighing on risk appetite.
The Federal Reserve will hold its latest policy meeting on Tuesday and Wednesday this week. Higher interest rates tend to be negative for commodity prices as they can dampen economic growth.
