Key Takeaways
- Copper prices declined on Thursday amid concerns over higher interest rates.
- US economic data showed a more than five-year high in business activity in September.
- Interest rate expectations increased, with a 72% chance of a rate hike in October.
Copper prices fell on Thursday, dropping 0.22% to $14,586.5 per metric ton on the London Metal Exchange by 0317 GMT.
The decline in copper prices was influenced by fears of higher interest rates, which could dampen demand for the metal.
Analysts at Chinese broker Galaxy Futures noted that hotter-than-expected US economic data, showing a more than five-year high in business activity in September, raised concerns about higher interest rates.
The probability of a US Federal Reserve rate hike in its October meeting increased to 72%, up from 49% a week earlier, according to the CME’s Fedwatch tool.
Oil prices also saw a slight decrease after Iran expressed openness to diplomacy, providing some relief after previous tensions.
The war between Iran and the US has pushed energy prices higher, contributing to inflation and potentially higher interest rates, which can reduce demand for commodities like copper.
Copper prices were supported this week by strong buying from China ahead of national holidays, but dollar gains and profit-taking pushed the metal off recent record highs.
The Yangshan copper premium, a measure of China’s appetite for imported copper, remained stable at $117 per ton, up 62.5% from the start of the month.
Among other metals, aluminium lost 0.45%, zinc dipped 0.24%, lead slipped 0.18%, nickel eased 0.16%, and tin was little changed, up only 0.04% on the London Metal Exchange.
On the Shanghai Futures Exchange, aluminium was little changed, up only 0.02%, zinc ticked 0.13% higher, lead lost 0.82%, nickel lost 0.79%, and tin dipped 0.25%.
