Industrial metals prices decline on prospects for U.S. rate hike
Aug 29 (Reuters) - Base metals prices in Shanghai fell on Monday on worries of slower economic growth and metals demand after U.S. Federal Reserve Chair Jerome Powell signalled more interest rate hikes.
Powell on Friday warned that Americans were headed for a painful period of slow economic growth and possibly rising joblessness. Slowing growth could lead to weakening demand for base metals, and copper is often used as a gauge of the global economic health.
"Powell's speech at the annual meeting was hawkish, and it is expected to have an impact on prices in the short term," said Jinrui Futures in a note.
The most-traded October copper contract on the Shanghai Futures Exchange closed down 1.3% at 62,550 yuan ($9,039.41) a tonne. Nickel dropped 5% to 165,060 yuan a tonne and zinc slipped 1.6% to 25,025 yuan a tonne.
The global nickel market could see a surplus of 111,000 tonnes this year and an excess of 122,000 tonnes in 2023 due to new production capacities in Indonesia, after a deficit of 157,000 tonnes in 2021, research house Antaike said on Friday.
ShFE aluminium declined 0.6% to 18,675 yuan a tonne, having gained as much as 2.4% earlier in the session to its highest since June 30 on supply worry as soaring electricity prices in Europe triggered output cuts.
The London Metal Exchange is closed for a public holiday.