Copper prices slipped on Tuesday, as aggressive rate hikes impacting global growth and a spike in COVID-19 cases in top consumer China raised demand concerns, although an expected strike in top producer Chile offered some support.
Three-month copper on the London Metal Exchange was down 0.7% at $8,917 a tonne by 0705 GMT, after falling to its lowest since Sept. 21 at $8,830 on Monday.
The most-traded July copper contract in Shanghai ended daytime trading 0.9% lower to 68,030 yuan ($10,158.89) a tonne.
“The market is seller-fatigued from last week’s central bank rate hikes and is sitting tight ahead of Powell’s testimony to Congress,” said Stephen Innes, managing partner at SPI Asset Management.
Aggressive rate hikes by major central banks to combat soaring inflation have raised worries about an economic slowdown. The U.S. Federal Reserve raised rates by 75 basis points last week for the largest increase since 1994.
Meanwhile, China’s strict “zero-COVID” policy of constantly monitoring, testing and isolating its citizens to prevent the spread of the coronavirus has battered the country’s economy and manufacturing sector.
FED: Fed Chair Jerome Powell will deliver a semi-annual monetary policy testimony before the Senate Banking Committee and the House Financial Services Committee later this week.
COPPER: Workers at Chile’s state-owned Codelco, the world’s largest copper producer, will start a nationwide strike on Wednesday to protest the government and the company’s decision to close a troubled smelter, a union official said.
INVENTORIES: At 117,025 tonnes, copper stocks in LME-registered warehouses are down 35% since mid-May.
SANCTIONS: Several European Union countries are pushing to start work on a new package of sanctions against Russia and Belarus for the invasion of Ukraine and also want to grant more military support to Kyiv.
OTHER METALS: LME aluminium fell 0.2% to $2,522 a tonne, zinc added 0.7% to $3,542.50, lead gained 0.6% to $2,080.50, nickel was up 0.3% at $25,820, and tin fell 0.6% to $30,615.
Shanghai aluminium gained 0.5%, zinc eased 0.2%, nickel rose 0.8%, lead climbed 1.9% and tin fell 2.4%.
