Copper slips on rate hike fears, aluminium extends decline
XLB•Copper fell 0.4% to $14,427.50 a metric ton on the London Metal Exchange as persistent inflation raised concerns about further rate hikes. Aluminium dropped 0.6% to $2,969, its lowest level in more than nine months.
1. Copper retreats
Benchmark three-month copper on the London Metal Exchange fell 0.4% to $14,427.50 a metric ton after reaching a three-week peak in the previous session. The most-traded Shanghai copper contract declined 1.1% to 109,760 yuan a ton. ANZ strategist Daniel Hynes said strike threats in Chile had supported copper gains, but the prospect of tighter monetary policy caused the metal to give them up.
2. Rates and supply
U.S. consumer prices accelerated in September as gasoline costs surged, putting a rate increase later this month back on the radar. Higher rates can dampen economic activity and pressure industrial-metals demand. In Chile, two unions began a strike at Centinela mine a week ago after contract talks with mine owner Antofagasta Minerals failed; Codelco partially suspended operations at El Teniente on Sunday after a fatal landslide. LME aluminium fell for a third straight session, while zinc, nickel and tin also declined; lead edged higher.
