HANOI: London copper prices fell to their lowest in nearly two months on Thursday, weighed down by strength in the dollar after the US Federal Reserve brought forward its outlook for an interest rate hike.
Three-month copper on the London Metal Exchange fell 1.5 per cent to $9,520.50 a tonne by 0518 GMT, having dropped as much as 2.6 per cent earlier in the session to the April 23 low of $9,415.
The most-traded July copper contract on the Shanghai Futures Exchange dipped 0.1 per cent to 68,950 yuan ($10,735.19) a tonne, on track for a fifth straight session of losses.
The dollar rose to its highest level in almost two months versus major peers as the Fed began closing the door on its pandemic-driven monetary policy.
A stronger dollar makes greenback-priced metals more expensive and less appealing to holders of other currencies.
“Due to the sharp increase of Fed officials’ expectations for the future economic outlook, the US dollar has been greatly boosted,” Huatai Futures said in a note.
The Fed signal, coupled with China‘s plans to sell state reserves of copper, pressured prices, the company said, recommending a “wait-and-see” approach for investors.
LME nickel dropped 1.5 per cent to $17,390 a tonne, aluminium fell 0.6 per cent to $2,454.50 a tonne, zinc shed 0.7 per cent to $3,004 a tonne and lead declined 0.9 per cent to $2,183.50 a tonne.
ShFE nickel decreased 1.7 per cent to 127,940 yuan a tonne, aluminium edged up 0.2 per cent at 18,770 yuan a tonne while zinc advanced 0.7 per cent to 22,715 yuan a tonne.
China’s production of secondary aluminium will almost triple by the end of this decade if all announced recycling projects come to fruition, Rusal said, as the country caps primary smelting capacity and looks to reduce emissions.
($1 = 6.4228 yuan)