LONDON: Copper prices held near 16-month lows on Wednesday as investors weighed the likelihood of rapid interest rate hikes hurting economic growth and metals demand.
Industrial metals have tumbled alongside stock markets as central bankers stepped up talk of action to contain decades-high inflation.
Benchmark copper on the London Metal Exchange (LME) was up 0.7% at $8,420 a tonne as of 1035 GMT, near last week’s low of $8,122.50 and down from a record high of $10,845 in March.
“It’s too early to say if we’re out of the woods,” said Saxo Bank analyst Ole Hansen.
“It depends on the level to which we see a deterioration of the view on global growth and whether China can find a way out of its COVID lockdowns.”
Interest Rates: Weak economic data in Europe and the United States has not prevented central bankers from doubling down on hawkish rhetoric.
Markets: Global equities slipped for a second consecutive day. Oil prices rose.
Copper firms after China relaxes quarantine rules
China Factories: COVID restrictions have disrupted manufacturing in China, the biggest metals consumer, but a Reuters poll showed that factory activity there likely expanded in June for the first time in four months.
China Property: In a positive sign for metals demand, homebuilder China Vanke Co said the troubled Chinese property market has bottomed in the short term.
Positioning: Speculative investors are turning bearish on copper.
Fundamentals: Output disruptions, supply dislocations and relatively thin exchange inventories support metal prices, Standard Chartered analysts said in a note.
Aluminium: Some Japanese aluminium buyers have agreed to pay a premium of $148 a tonne over the benchmark price for July-September shipments, down 14% from the current quarter, sources said.
Metals Prices: LME aluminium was down 0.9% at $2,467.50 a tonne, zinc rose 0.4% to $3,346.50, nickel was up 3.4% at $23,935, lead slipped 1.5% to $1,941 and tin was 4.8% lower at $25,505.
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