Copper slips as nervous investors wait for Fed signals
- LME copper has been trending lower since touching a record peak of $10,747.50 a tonne in May, but is still up 21% so far this year.
LONDON: Copper prices lost ground in low volumes on Wednesday as investors waited on the sidelines for US central bank officials to clarify their stance on rising inflation.
Three-month copper on the London Metal Exchange had slipped 0.4% to $9,371 a tonne by 1035 GMT, the third straight day of losses.
LME copper has been trending lower since touching a record peak of $10,747.50 a tonne in May, but is still up 21% so far this year.
"Today the main focus of the market is on the Fed. We have low volumes because people are waiting for more guidance regarding rate policy after the US CPI numbers came in much higher than expected," said Xiao Fu, head of commodity market strategy at Bank of China International.
China demand worries knock copper market sentiment
US Federal Reserve Chair Jerome Powell begins two days of grilling by US lawmakers on Wednesday after data showed US consumer prices increased by the most in 13 years in June.
A dip in physical demand in top metals consumer China was also weighing on the market after China's copper imports fell for a third straight month in June.
"The high copper prices are having an impact on demand, which has reduced some of the downstream orders and we are seeing that in the lower Chinese import numbers in June," Fu added.
The most-traded August copper contract on the Shanghai Futures Exchange closed down 0.4% to 68,870 yuan ($10,637.28) a tonne.
The US dollar held near a three-month high against its rivals, making commodities priced in the US currency more expensive for buyers using other currencies.
COLUMN: Fund managers have been reducing their exposure to copper as the market heads into what is normally a seasonally weak spot for demand.
LME aluminium shed 0.4% to $2,525 a tonne, lead dropped 0.7% to $2,295.50 and nickel slipped 0.6% to $18,660, but zinc added 0.3% to $2,942 and tin rose 0.2% to $32,430.
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