Key Takeaways
- Copper prices fell by 0.25% to $14,379 a metric ton.
- The US dollar index rose 0.14% to 102.05, pressuring industrial metals.
- Higher oil prices due to supply concerns also impacted copper demand.
Copper prices experienced a slight decline on Wednesday, dropping by 0.25% to $14,379 a metric ton by 0300 GMT, according to the London Metal Exchange.
The rise in the US dollar index, which measures the dollar against a basket of currencies and increased by 0.14% to 102.05, had a significant impact on the prices of industrial metals, including copper.
Additionally, higher oil prices, driven by supply constraints from a storm in US oil-producing regions and attacks by Yemen’s Houthis on Saudi Arabia, further pressured copper prices.
The consultancy S&P Global predicts that growth in the AI and defence sectors will boost copper demand by 50% by 2040, highlighting the long-term potential for the metal.
However, the market remains cautious, as the Federal Reserve is expected to release minutes from its September policy meeting, potentially indicating further rate hikes.
Aluminium prices, on the other hand, showed a slight increase of 0.25%, supported by supply risks related to heightened Middle East tensions.
Despite the recent increase, prices for aluminium have fallen by more than 17% since reaching a four-year high in June, influenced by easing supply concerns and expectations of new production capacity in Indonesia.
Other industrial metals experienced mixed movements, with zinc dipping 0.23%, lead falling 0.13%, nickel rising 0.11%, and tin dropping 0.09%.
The Shanghai Futures Exchange was closed for the day and will reopen on Thursday following a holiday.
