Copper prices fell to a two-month low, after the US Federal Reserve raised expectations of interest rate hikes, boosting the dollar and weakening demand for the metal.

Prices have also been hit by top consumer China’s plan to release industrial metals from national reserves to rein in rising commodity prices.
Three-month copper futures on the London Exchange fell 4% to $9,285 a tonne, after hitting its lowest level since April 20, 2021 ($9,276 a tonne).
“What’s driving prices is the Fed and China saying they’re going to throw copper, Ali and zinc into the market,” said independent consultant Robin Bhar.
The Fed said changes to policy, including rate hikes and the end of bond purchases, could happen earlier than expected. This pushed the dollar to a two-month high, making greenback-denominated commodities more expensive and less attractive than other currencies.
In addition, copper prices are under downward pressure as the top consumer – China – plans to release industrial metal from the national stockpile to curb rising commodity prices.
China will issue new regulations governing the price index of goods and services, as the government steps up oversight of the country’s commodity markets and battles to contain inflation.
Copper reserves in London rose to a one-year high at 132,125 tonnes.

On the London bourse, prices of other metals also fluctuated, with aluminum down 3% to $2,394 per ton, zinc down 4% to $2,905, lead down 3% to $2,133, tin down 1.8% to $30,645, while nickel fell 2.5% to $17,180.

Source: VITIC/Reuters

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