SHANGHAI: Most base metals declined on Wednesday, with copper pulling back from a one-month high, weighed down by a strong US dollar. Three-month copper on the London Metal Exchange (LME) slid 0.5% to $9,112 per metric ton by 0337 GMT.
The dollar’s rally slowed due to caution ahead of the highly anticipated US consumer inflation report, due later in the day, prompting hesitation in taking on new positions.
The dollar index, which measures the US currency versus six other units, stood at 109.24 - not far from the 26-month high of 110.17 touched on Monday.
A stronger dollar makes greenback-priced commodities more expensive for holders of other currencies.
US producer prices rose less than expected in December as higher costs for goods were partially offset by stable services prices, suggesting inflation remained on a downward trend but did not change the view that the Federal Reserve would not cut rates before the second half of the year.
The potential impact of US President-elect Donald Trump’s planned tariffs and the Fed’s cautious stance on rate cuts have driven up Treasury yields and strengthened the dollar.
“The US dollar is pretty strong these days, exerting pressure on metals prices. Meanwhile, investors adopt a wait-and-watch attitude before Trump’s inauguration,” a trader said.
Copper steadies at one-month peak as China stimulus kicks in
The most active copper contract on the SHFE was down 0.2% at 75,150 yuan ($10,250.15) a ton by the close of the Asia morning trade session.
LME aluminium was flat at $2,560 a ton, tin fell 1.1% to $29,445, nickel slipped 0.8% to $15,825, lead slid 0.9% to $1,948.5 and zinc lost 1.4% to $2,822.
SHFE aluminium slid 1.0% to 20,090 yuan a ton, nickel was down 0.5% to 127,200 yuan, zinc fell 2.5% to 23,575 yuan, lead gained 0.2% to 16,530 yuan and tin shed 1.3% to 245,300 yuan.
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