LONDON: Copper prices pulled back on Friday after touching their highest in nearly two months after the head of the US Federal Reserve doubled down on more interest rate hikes and warned that it would be painful.
Earlier, copper and aluminium prices had shot up on worries over an energy crisis hitting output while supply is tight and inventories low.
Three-month copper on the London Metal Exchange (LME) gained as much as 2.3% to $8,318 a tonne, its highest since June 30, before paring gains to $8,163 by 1600 GMT, a rise of 0.4%.
Copper prices have rebounded 17% since touching 20-month lows on July 15, but are still down 25% from a record peak scaled in March. Prices retreated after Federal Reserve Chair Jerome Powell warned that the US economy will need tight monetary policy “for some time” before inflation is under control, which means slower growth. “The recession fears are still there in the background,” said WisdomTree commodity strategist Nitesh Shah.
Prices were earlier boosted by concern about soaring power prices, which have hit energy-intensive aluminium and zinc the most, causing smelter cutbacks and boosted costs for metals producers across the board.
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