LONDON: Copper prices fell in London on Wednesday as a stronger dollar and further signs of stagnating euro zone economy offset support from economic stimulus in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) was down 0.4% at $8,019 per metric ton in official open-outcry trading after touching a two-week high of $8,104.
China’s latest support measures, announced on Tuesday, provided a boost to demand prospects for metals, but China’s economic growth slowdown, fears of a higher-for-longer interest rate environment and weak global manufacturing remain the key risks for the base metals ahead, said ING analyst Ewa Manthey.
“Elevated rates have been a drag on industrial metals consumption. If the US rates stay higher for longer, this would lead to a stronger US dollar and weaker investor sentiment, which in turn would translate to lower metals prices,” she added.
Federal Reserve Chair Jerome Powell will give brief introductory remarks at an event on Wednesday. The dollar index climbed, making commodities priced in the US currency more expensive for buyers using other currencies.
Across the euro zone, bank lending came to a near standstill last month, providing further evidence that the 20-nation bloc was skirting a recession.
LME aluminium climbed 0.8% to $2,208 a ton while zinc gained 1.0% to $2,466 in official activity. Both metals hit their highest since Oct. 12 of $2,219.5 and $2,480 respectively, earlier in the session.
Tin was up 0.2% at $25,150. Lead lost 0.7% to $2,095 after daily LME data showed further growth of stocks in LME-registered warehouses to the highest since March 2021.
Nickel rose 0.5% to $18,360 after hitting a new two-year low of $17,930 on Tuesday. Daily LME data showed fresh cancellations of 3,156 tons of nickel stocks which cut on-warrant inventories to the lowest since early September.
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