BEIJING: Copper prices edged higher on Wednesday, buoyed by a weaker dollar amid hopes the pace of US interest rate hikes would slow down, although economic uncertainty lifted demand pressure.
Three-month copper on the London Metal Exchange was up 0.1% at $7,530 a tonne, as of 0516 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange was up 0.1% to 63,050 yuan ($8,650.02) a tonne.
The dollar wallowed near a three-week low versus major peers on Wednesday as more signs of economic weakness in the United States fanned speculation about a less hawkish Federal Reserve.
A weaker dollar makes it cheaper for non-US currency holders to buy the greenbank-priced commodity.
“The slightly eased Fed jitters revived sentiment, still we hold a cautious attitude as policy and economic uncertainty will continue to dominate the market,” a China-based futures trader said.
Investors were worried about Beijing’s policy direction following the 20th National Congress of the Communist Party of China that ended last weekend, which sparked a sell-off earlier this week that dragged down Chinese assets market and Chinese yuan.
Although China’s GDP rebounded at a faster-than-expected pace in the third quarter, but strict COVID-19 curbs, a deepening property crisis and global recession risks are challenging Beijing’s efforts to foster a robust revival over the next year.
Copper retreats on projected demand slowdown
Chile’s government on Tuesday amended a proposed mining royalty bill that drew criticism from miners, removing provisions that assessed higher rates for larger miners and linked payments to copper prices, while implementing a flat 1% ad valorem tax rate for large producers.
LME aluminium climbed 1.3% at $2,244.50 a tonne, while zinc declined 0.4% to $2,893.50 a tonne, lead lost 0.1% to $1,865.60.
Supply uncertainties continued to overhang on the market with the LME under discussion of blocking Russian metal from its trading system, and also possible restrictions to be implemented by the US on imports from Russia.
SHFE aluminium added 1.2% to 18,745 yuan a tonne, nickel gained 1.4% to 190,720 yuan a tonne, while zinc lost 1.1% to 24,295 yuan a tonne.
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