Copper prices edged lower on Thursday 24 September, as lingering inflation concerns outweighed worries over potential supply disruptions.
Benchmark three-month copper on the London Metal Exchange (LME) fell as much as 1% to US$14,617 ($20,844) a tonne earlier in the session before paring some losses.
Comex copper futures were little changed at around US$6.7735 per pound after markets closed in New York.
The pullback puts the brakes on a potential rally towards new records that had been fuelled by stronger Chinese demand ahead of the country’s October holiday period.
Macro pressures weigh
Thursday’s move coincided with gains in oil prices, adding to concerns over inflation and expectations that the Federal Reserve could raise interest rates further.
The potential of another Fed hike has supported the US dollar. However, this has made metals such as copper more expensive for buyers using other currencies.
Copper had rallied in recent sessions amid stronger Chinese demand, with a key gauge of imports recently climbing to a four-year high.
With the world’s largest copper-consuming market entering a quieter period around the Mid-Autumn Festival and Golden Week holidays, investors have scaled back activity.
Chinese stocks are coming off their biggest one-day decline in a month.
“China is out, but really it’s the macro weight,” Marex Senior Base Metals Strategist Alastair Munro tells Reuters.
Supply risks offer support
Still, supply concerns continue to provide some support for copper prices.
Escondida in Chile, the world’s largest copper mine, shut down on Wednesday after a worker was killed in an accident. Meanwhile, the country’s Centinela operation is also facing potential strike action.
Copper has gained around 9% so far this quarter after hitting a record high two weeks ago.
Write to Jackson Chen at Mining.com.au
Main Image: KGHM
