Copper prices decline amid US inflation and Fed expectations
The price of copper per ton traded on the London Metal Exchange dropped by 0.5 percent following data from the US and expectations of interest rate hikes.
Higher-than-expected inflation in the US and growing expectations that the US Federal Reserve (Fed) will raise interest rates triggered a decline in base metal markets.
Decline in Copper Prices
Inflation data announced above expectations in the US strengthened investors' expectations that the US Federal Reserve (Fed) will proceed with an interest rate hike.
Futures copper contracts on the London Metal Exchange (LME) started the new week with a decline following their first weekly drop since June.
Latest Situation in the Markets
While the price of copper per ton on the LME fell by 0.5 percent to $14,173, losses in the contracts reached up to 0.7 percent.
The strengthening dollar and pressure on risky assets caused a drop in base metal prices, led by copper.
Supply Tightening and Premiums
The premium paid for spot copper relative to three-month futures contracts remained at $1 per ton, indicating that supply tightness has eased.
Sucden Financial analysts assessed that speculative long positions have decreased and short-term supply tightness has eased.
Trend in Other Metals
As of 13:58 Singapore time, zinc lost 1.3 percent in value, while there was no change in aluminum prices.
Iron ore dropped for the fourth consecutive session, falling 0.5 percent to $96.90 per ton.