Copper prices fell on Monday from near six-month highs because the US dollar strengthened and concern continues ahead of key central bank meetings that might provide additional clues on the leads of global economy growth and metals demand.
The most actively traded January copper contract on the Shanghai Futures Exchange fell 1% to 66,140 yuan ($9,508) per metric ton. While three-month copper on London Metal Exchange fell 1.1% to $8,448 per metric ton.
The dollar strengthened as a result of data that showed producer prices in the US increased more than anticipated last month, indicating ongoing inflationary pressures and igniting concerns the Federal Reserve might need to maintain higher interest rates for longer.
A higher dollar makes Metals more costly for holders of other currencies.
As investors anticipated China’s relaxation of its COVID-19 restraints would help boost global economy growth and commodities demand. Copper prices reached their highest level since June on Friday.
Investors are preparing for the Fed to raise rates by half a percentage point this week. A reduction from its recent string of increases of three quarters of a percentage point.
Additionally, interest rate increases are expected to be announced by the European Central Bank as well as the Bank of England.
Due to falling ore grades at the Chilean mines. Global miner Anglo American PIc decreased its estimated copper production for 2023 on Friday. It also lowered its higher end output objective for 2022.
LME lead down 1.2% to $2,174, zinc fell 0.8% to $3,215. Tin fell 2% to $23,805, and aluminium fell 1.4% to $2,446 per tonne.
Zinc dropped 0.2% at 24,790 yuan, nickel down 1.1% at 218,190 yuan. While tin dropped 3.4% at 190,980 yuan and SHE aluminium dropped 1.9% at 18,860 yuan per metric ton.
Prices in the oil market increased by more than 1% after hitting their lowest point of the year due to concerns of a worldwide recession.
WTI crude for the United States gained 1.4% at $72.03 per barrel on the futures market. While Brent crude closed the session at $77.15 per barrel, also up 1.4%.