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Copper prices fell on Thursday on a strong dollar, while waiting for U.S. inflation data later in the day that could determine the size of any upcoming rate increase by the U.S. Federal Reserve.
Three-month copper on the London Metal Exchange CMCU3 fell 0.5% to $7,507.50 a tonne by 0631 GMT, aluminium CMAL3 slid 0.9% to $2,284 a tonne, zinc CMZN3 rose 0.6% to $2,924.50 a tonne, while tin CMSN3 advanced 0.4% to $19,905 a tonne.
The dollar .DXY was hovering near its multi-decade highs, making metals priced in the U.S. currency expensive to holders of other currencies.
The U.S. inflation data due later on Thursday is expected to be strong, which would give the Federal Reserve more justification for raising interest rates.
Meanwhile, fears of recession in Europe, where the economy has been hit by an energy crisis, also weighed on the metals demand outlook and appetite for higher-risk assets.
China’s rising COVID-19 cases and its persistence in sticking to strict COVID-19 policies could pose some risks to demand, but consumption on the ground has been strong, especially from the wirerod sector, analysts and traders said.
Premium for copper imported into China SMM-CUYP-CN has reached $128.50 a tonne, a one-year high.
Copper in the Chinese spot market, flipped to a discount of 225 yuan a tonne to ShFE prices SMM-CU-PND on Wednesday, the biggest discount since April 2021, SMM data showed, as market participants switched to a new futures contract, said CRU analyst He Tianyu.
The most-traded November copper contract on the Shanghai Futures Exchange SCFcv1 was unchanged at 62,350 yuan ($8,673.21) a tonne, nickel SNIcv1 advanced 0.6% to 180,770 yuan a tonne and zinc SZNcv1 rose 0.2% to 24,605 yuan a tonne.
The premium of LME cash aluminium over the three-month contract CMAL0-3 rose to $14.50 a tonne, a level unseen since Aug. 23, indicating tightness in immediately available supply, following news that the United States was considering banning the alloy from Russia, which produces about 6% of the world’s output.