Copper prices fell on Wednesday, following bets on major rate hikes in the US following aggressive comments by Federal Reserve officials, and a recent batch of weak economic data from China, which has turned attention back to concerns about global economic growth.
Benchmark three-month copper on the London Metal Exchange (LME) fell 0.6% to $9,306 per tonne, as of 0500 GMT, after hitting a week-long high of $9,434 on Tuesday.
June’s most active copper contract on the Shanghai Futures Exchange fell 0.1% to 71,600 yuan ($10,606.31) per tonne by midday.
“There is some selling pressure as China’s economic data has come in on the low side following a forced lockdown in Shanghai,” said Jigar Trivedi, a commodities analyst with Mumbai-based broker Anand Rathi Shares.
“In addition, the dollar is recovering after the Fed chairman’s statement to continue with rate hikes.”
Fed Chair Jerome Powell promised on Tuesday that the U.S. central bank would raise interest rates as high as necessary to end the rise in inflation it says threatens the economy’s base.
The dollar rose 0.1% against its rivals, making dollar-denominated metals more expensive for buyers using other currencies.
DATA: China’s new home prices fell month-on-month in April for the first time since December, official data shows, hit by strict COVID-19 lockdowns in many cities.
This comes after data showing Chinese economic activity cooled sharply in April as lockdowns took a heavy toll on consumption, industrial production and employment.
China’s decision to ease some COVID-19 restrictions provided some respite and fueled expectations of a recovery in metals demand.
COVID: Shanghai reached its fourth straight day with no new infections in the community, maintaining its prized “zero COVID” status and keeping alive hopes for an early end to the lockdown woes.
PRICES: LME aluminum was down 0.6% to $2,874 per tonne, zinc was down 0.7% to $3,634, lead was down 0.8% to $2,084 and tin was down 1.9% to $33,410.
Shanghai aluminum was down 0.3%, zinc was down 1.1%, nickel was down 0.1%, lead was down 1%, while tin was down 3.2%.
($1 = 6.7507 Chinese Yuan) (reporting by Brijesh Patel in Bengaluru; editing by Rashmi Aich and Subhranshu Sahu)
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