Prices of industrial metals fell on Wednesday as hawkish comments from the U.S. Federal Reserve Chair outweighed expectations of healthy demand from top consumer China. Three-month copper on the London Metal Exchange fell 0.4% at $8,732 a tonne by 0749 GMT, and the most traded April copper contract on the Shanghai Futures Exchange ended the day trading 1% lower at 68,880 yuan ($9,888.17) a tonne. Fed Chair Jerome Powell on Tuesday said the U.S. central bank is likely to increase interest rates more than anticipated to tame inflation. Powell's remarks also pushed the dollar to a three-month high against a basket of currencies on Wednesday, making it less attractive for non-dollar holders to buy the greenback-priced commodity.
Among other LME metals, tin led the downtrend with a 1.9% drop to $23,730, aluminium lost 0.9% to $2,330 a tonne, lead eased 0.6% to $2,075.50, and zinc was down 1.1% at $2,922.50.
"The lower prices bring buy-in opportunity, while we are still holding a cautious optimistic view of China's demand," a Shanghai-based futures trader said.
Demand for copper, a metal widely used in the power, construction and transportation sectors, is expected to rise amid a recovery in manufacturing activity in China.
Participants expect a moderate growth in demand this year, underpinned by a relatively more stable property sector.
Sales of new and second-hand commercial housing in China ended 13 months of falls in January and February, the minister for housing said on Tuesday, on the sidelines of an annual meeting of parliament.
Improved spot buying, together with lower imports in recent
months, resulted in a gain in spot premium, up 25 yuan a tonne
to 30 yuan on Tuesday, according to the Shanghai Metals Market.
SHFE zinc declined 0.7% to 23,260 yuan, tin was down 1.2% at 197,140 yuan, aluminium slid 0.5% to 18,540 yuan, and nickel fell 1.4% to 186,830 yuan a tonne. For the top stories in metals and other news, click or ($1 = 6.9659 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; Editing by Janane Venkatraman and Sonia Cheema)
LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES ))
