Copper prices fell on Wednesday as the United States speculated on a big rate hike and recent weak economic readings from China focused on concerns about global economic growth, following criticism from Federal Reserve officials.
On the London Metal Exchange (LME) benchmark copper fell 0.6% to $ 9,306 per tonne, as of 0500 GMT, after hitting a one-week high of $ 9,434 on Tuesday.
The most active June copper contract on the Shanghai Futures Exchange fell 0.1% to 71,600 yuan ($ 10,606.31) a ton during the midday break.
Jigar Trivedi, a product analyst at Mumbai-based broker Anand Rathi Shares, said:
“Also, the dollar is rebounding after the Fed Chair statement to continue rate hikes.”
Fed Chair Jerome Powell on Tuesday promised that the US Federal Reserve would raise interest rates as needed to stem the rise in inflation, which he said posed a threat to the economy.
The dollar rose 0.1% against its rivals, making greenback-formatting metals more expensive for buyers using other currencies.
Data: In April, China’s new home prices fell for the first time in a month since December, with official data showing that many cities have been hit by severe COVID-19 lockdowns.
This comes after data showed that China’s economic activity has cooled sharply as a result of the lockdown in April, which caused massive losses in consumption, industrial production and employment.
To give some leeway, China’s decision to ease some COVID-19 restrictions has sparked expectations of a recovery in metal demand.
COVID: The Shanghai community has achieved its fourth consecutive day without any new infections, retaining its precious “zero COVID” status and keeping the hope of an imminent end to the lockdown crisis alive.
Prices: LME aluminum fell 0.6% to 8 2,874 a ton, zinc 0.7% to $ 3,634, lead 0.8% to $ 2,084 and tin 1.9% to $ 33,410.
Shanghai Aluminum is down 0.3%, Zinc is down 1.1%, Nickel is down 0.1%, Lead is down 1%, while Tin is down 3.2%.
($ 1 = 6.7507 Chinese Yuan) (Reporting by Brijesh Patel in Bangalore; Editing by Rashmi Ich and Shuvrangshu Sahu)