(Updates throughout)
By Polina Devitt
LONDON, May 3 (Reuters) - Aluminium and copper prices in
London fell on Wednesday as investors awaited the U.S. Federal
Reserve's decision on interest rates as concerns about global
economic growth persist.
Three-month copper on the London Metal Exchange
(LME) was down 0.4% at $8,481.5 a tonne by 1643 GMT, having
touched a one-week high of $8,770.15 on Tuesday. Aluminium fell 1.9% to $2,321 per tonne.
"The market has been caught up in the general nervousness
regarding the global economic outlook," Saxo Bank strategist Ole
Hansen said.
Commodity markets were under pressure on Wednesday with oil
prices plunging as much as 4.8% as the Fed is expected
to raise interest rates on Wednesday and the European Central
Bank is expected to hike rates on Thursday.
"Markets are fearing demand destruction from tighter
monetary policy," said WisdomTree analyst Nitesh Shah.
Copper might be doing better than aluminium because its
market is tighter in the long term, he added.
The copper market is expected to be in deficit this year
with improved Chinese demand, the International Copper Study
Group said last week. It had previously expected a surplus.
Chile's copper production dropped 4.7% in March.
Copper prices are expected to recover slightly in coming
months, a Reuters poll showed.
In other metals, zinc rose 0.2% to $2,615, lead fell 2.1% to $2,126.5, tin was up 0.6% at
$26,640.
Nickel fell 0.8% to $24,775, after touching a
two-week high of $25,420. Indonesia cut tax incentives to limit
investment in lower quality nickel products as it aims to push
for further downstream investment, a cabinet minister said.
(Reporting by Polina Devitt
Additional reporting by Enrico Dela Cruz; Editing by David
Goodman and Richard Chang)
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