Three-month copper on the London Metal Exchange was down 1% at $9,107 a tonne at 1700 GMT after rising on Tuesday to its highest since Feb. 2. U.S. Comex copper futures dropped 1.5% to $4.16 a lb. LME copper rallied 10% in January, but is little changed so far this month. Stocks and oil prices were also weak ahead of the release of minutes from the U.S. Federal Reserve's meeting of Jan. 31-Feb. 1, due at 1900 GMT. "People are waiting for the Fed minutes later today and I think the market is now anticipating three more hikes this year instead of only one more hike," said Amelia Xiao Fu, head of commodity market strategy at Bank of China International. U.S. business activity unexpectedly rebounded to an eight-month high in February, data showed on Tuesday, suggesting the Fed would have to tighten monetary policy more to dampen inflation. The Fed must get inflation under control this year or risk a repeat of the 1970s, a Fed official said on Wednesday. Weak metals demand in China was also weighing on the market. "People are also waiting for more visible signs of a demand recovery in China. At the moment, the purchases are mostly on a hand-to-mouth basis," Fu said. "After the recent stock build during the Chinese New Year, which was a bit higher than expected, it takes time to destock." Copper in the Chinese spot market was at a discount of 110 yuan a tonne to ShFE prices on Wednesday, the biggest discount since late December, SMM data showed. China's total copper consumption would rise around 3.5% in 2023 to 14.6 million tonnes, according to Rosealea Yao, an analyst at consultancy Gavekal Dragonomics.
"That improvement has probably already been priced in by the 6%-10% rise in domestic copper prices since the reopening rally started in early November," she said in a note. LME aluminium slid 2.2% to $2,414 a tonne, nickel dropped 2.4% to $26,460, zinc declined 2.6% to $3,054.50, tin lost 2.4% to $26,860 and lead eased 2.2% to $2,095.
For the top stories in metals and other news, click or (Reporting by Eric Onstad; Editing by Kirsten Donovan
Additional reporting by Siyi Liu and Dominique Patton in Beijing
Editing by Mark Potter)
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