Copper fell 1.2% on the London Metal Exchange and 1.9% in Shanghai as an equity selloff and fears of further interest rate hikes pressured prices. Aluminium extended its decline, with LME prices down 0.9% to a more than nine-month low.
Benchmark three-month copper fell 1.2% to $14,315.50 a metric ton on the London Metal Exchange, after reaching a three-week peak in the previous session. The most-traded Shanghai contract dropped 1.9% to 108,940 yuan a ton. Analyst Kyle Rodda said pressure on chip stocks and rising odds of Federal Reserve rate hikes were a “double whammy” for copper, while adding that the market remained fundamentally well supported.
Asian stocks sold off after stronger-than-expected U.S. inflation data. Consumer prices accelerated in September as gasoline costs surged, putting a rate hike later in the month back on the radar; higher rates can weigh on economic activity and demand for industrial metals. Two unions began a strike at Chile’s Centinela mine after contract negotiations with Antofagasta Minerals failed, while Codelco partially suspended operations at El Teniente following a fatal landslide.
LME aluminium fell 0.9% to $2,961 a ton, its lowest level in more than nine months. Shanghai aluminium dropped 1.3% to 23,040 yuan, after touching its lowest since July 21. LME zinc, nickel and tin fell, while lead edged higher; Shanghai zinc, lead, nickel and tin all declined.
