Copper slips ahead of Fed rate decision, aluminium rises on Gulf fighting
- Benchmark three-month copper on the London Metal Exchange was down 0.4% at $13,631 a metric ton
LONDON: Copper fell on Wednesday in cautious trade ahead of a Federal Reserve interest rate decision later in the day and signs of easing supply tightness in the world’s biggest consumer China, while aluminium rose in response to renewed fighting in the Middle East.
Benchmark three-month copper on the London Metal Exchange was down 0.4% at $13,631 a metric ton by 1002 GMT, but held above the 50-day moving average, providing support at $13,576.
The U.S. dollar was near one-month highs as investors stayed on the sidelines ahead of the Fed’s decision, with markets pricing in a roughly 30% chance of a 25-basis-point hike.
A strong U.S. currency makes dollar-priced metals more expensive for buyers using other currencies, while the prospect of higher rates weighs on demand expectations for growth-dependent metals.
Adding further pressure on copper as well as on zinc, Asian stocks extended a selloff caused by worries about AI valuations.
The Yangshan copper premium, a gauge of interest in importing metal to China, stabilised at $112 a ton, indicating easing demand compared with a week ago, when it hit $115, the highest since November 2022.
Available LME copper stocks edged up to 101,975 tons as 975 tons were put back on warrant in the LME-registered warehouses in Taiwan.
The available stocks remain at the lowest since January after heavy cancellations earlier this month, keeping the premium of the cash LME copper contract over the three-month forward at $30 a ton vs a discount of $49 at the start of July.
In other LME metals, aluminium rose 0.9% to $3,176 a ton as tensions in the Middle East escalated, inflating worries about metal supplies from the Gulf region and driving oil prices up sharply.
Available LME aluminium stocks are at a 16-month low of 245,350 tons, and are dominated by Russian-made metal, which many traders avoid.
LME zinc eased 0.1% to $3,572, lead rose 0.8% to $1,909, while tin and nickel added 1.2% to $54,180 and $17,175, respectively.
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