London copper dips on potentially sluggish peak season, Fed rate-cut hopes cap losses

Copper prices on the LME slipped in early Asian trade, weighed by potentially lackluster demand, though expectations of a US interest rate cuts capped losses.

Three-month copper on the London Metal Exchange dipped 0.25% to $9,988 per metric ton by 0223 GMT, while the most-traded copper contract on the Shanghai Futures Exchange gained 0.49% to 80,070 yuan ($11,241.68) a ton.

Despite the peak season for consumption approaching, the terminal margin has weakened, which may indicate a sluggish peak season, said broker Galaxy Futures.

Tamer-than-expected US producer price inflation data strengthened expectations for interest rate cuts, while eyes remain on Thursday’s consumer price inflation data for more cues on the Federal Reserve’s rate trajectory.

The dollar index, which measures the US currency against six major peers, was flat at 97.81, following the unexpected decline in US factory-gate prices.

Typically, lower interest rates from the Fed weaken the US dollar.

As the dollar declines, dollar-denominated metals become cheaper for buyers using other currencies, which can support increased demand.

Top global miner BHP’s focus on expanding its own copper assets means that it is unlikely to pounce on the planned merger between Anglo American and Teck Resources.

In the past year, BHP invested $2 billion for a stake in Canada’s Lundin, gaining access to two copper projects in Argentina, while also working to boost production at top copper mine Escondida in Chile.

Among other London metals, aluminium edged up 0.06% to $2,626.5 a ton, lead gained 0.1% to $1,989, and zinc increased 0.07% to $2,888.5, while nickel lost 0.27% to $15,105, and tin eased 0.31% to $34,500.

SHFE aluminium climbed 0.38% to 20,865 yuan, lead rose 0.24% to 16,880 yuan, tin gained 0.5% to 270,830 yuan, and zinc increased 0.34% to 22,245 yuan, while nickel eased 0.05% to 120,430 yuan.