LONDON: Copper prices eased on Thursday as the US Federal Reserve indicated it could tighten monetary policy faster than previously expected, boosting the dollar.
In a news conference following a Federal Open Market Committee meeting, Fed chief Jerome Powell said “the committee is of a mind to raise the federal funds rate at the March meeting assuming that the conditions are appropriate for doing so”.
The news boosted the dollar to its highest since July 2020, making metals priced in the US greenback less attractive to global buyers.
“The hawkish tone that Powell provided yesterday has taken the edge off commodity performance including in base metals,” said WisdomTree commodity strategist Nitesh Shah.
“Reduced liquidity means that what could be fueling demand for these metals could wane.”
Three-month copper on the London Metal Exchange was down 1.4% at $9,770 a tonne by 1700 GMT, snapping a two-session winning streak.
COPPER INVENTORIES: Capping further losses were low inventories of the metal in warehouses registered with the LME.
On-warrant copper stocks slipped to a two-month low of 65,750 tonnes.
COPPER SUPPLY: Miner Anglo American said its overall production for the fourth quarter was flat as a strong diamonds performance countered a 4% fall in copper, for which it expects higher output this year.
MINING: Chile’s Senate on Thursday pushed forward an amended version of the country’s mining royalty bill, which would raise tariffs on firms operating in the world’s top copper producing nation despite being watered down amid industry pushback.
RUSSIA: The United States has set out a diplomatic path to address sweeping Russian demands in eastern Europe, as Moscow held security talks with Western countries and intensified its military build-up near Ukraine with new drills.
Russia is a major producer of metals including nickel and palladium.
OTHER METALS: LME aluminium was up 0.2% to $3,101 a tonne, zinc added 0.8% to $3,640, lead lost 0.5% to $2,311, tin was up 0.9% to $41,850 while nickel was down 1.3% to $22,405.
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