Shanghai copper edges lower as rate fears offset supply support

Among SHFE metals, aluminium SAFcv1 ticked 0.13% higher, zinc SZNcv1 added 0.44%, lead SPBcv1 gained 0.62%, nickel SNIcv1 lost 1.23% and tin SSNcv1 shed 1.3%.

Zinc was an August standout, gaining 5.87% amid supply tightness concerns.

($1 = 6.7207 Chinese yuan renminbi)

Copper nudged down on the Shanghai Futures Exchange (SHFE) on Monday, as bets of higher-for-longer U.S. interest rates offset supply concerns, which earlier had boosted the metal to a monthly rise in August.

The most-traded copper contract on the SHFE SCFcv1 edged 0.2% lower to 108,400 yuan ($16,129.27) a ton. The London Metal Exchange was closed on Monday for a public holiday in Britain.

Hawkish interest rate comments from U.S. Federal Reserve Chairman Kevin Warsh are exerting downward pressure on copper prices, analysts from Chinese broker Galaxy Futures said in a note.

In a closely watched speech at the Jackson Hole symposium last Friday, Warsh signalled that the Fed may need to raise rates if inflation remained above target.

Traders on Sunday priced in a 60% chance that the Fed would raise rates at its September meeting, up from 40% a week earlier, according to the CME's FedWatch tool.

Higher-for-longer rates are a concern to growth-dependent commodities like copper as they can dampen economic activity.

The dollar was also higher after Warsh's speech, hovering near a two-week high and weighing on copper, which is traded in the U.S. currency, by making it more expensive for buyers using other currencies.