Copper slips on sell-off in equities and rate hike fears, aluminium extends decline
XLB•Copper fell 0.2% to $14,458.50 a metric ton on the London Metal Exchange, while aluminium dropped 0.7% to a more than nine-month low of $2,964.50. The declines came as equity markets sold off and concerns grew about further U.S. interest rate hikes.
1. Copper and aluminium fall
Benchmark three-month copper fell 0.2% to $14,458.50 a metric ton on the London Metal Exchange after reaching a three-week peak in the previous session. The most-traded Shanghai copper contract lost 1% to 109,940 yuan a ton.
2. Rates and supply concerns
Analyst Kyle Rodda said copper faced pressure from the sell-off in chip stocks and increased odds of Federal Reserve rate hikes following hotter-than-expected inflation data, though he said the market remained fundamentally well supported. Higher rates can weigh on economic activity and demand for industrial metals. Separately, two unions began a strike at Chile’s Centinela mine a week ago, and Codelco partially suspended operations at its El Teniente mine after a fatal landslide.
3. Other metals retreat
LME aluminium fell 0.7% to $2,964.50, its lowest in more than nine months, while Shanghai aluminium declined 1.4%. LME zinc and tin also fell, while lead rose and nickel was flat.
