Copper prices eased to their weakest in nearly two weeks on Thursday, hit by profit-taking on reduced worries about supply, a selloff in AI stocks and concerns about rising inflation and interest rates.
Benchmark three-month copper on the London Metal Exchange shed 1.5% to US$14,279.50 ($20,663) a tonne by 14:30 GMT after touching the lowest since 2 October at US$14,256.
“Two things are happening at the same time: the easing worries of supply and the strong inflation report,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“That was too much for the market to chew in one go and some profit-taking is emerging.”
The technical outlook was also deteriorating, with copper challenging an uptrend that began in March and also edging below the 50-day moving average, he added.
Investors were less worried about mine disruptions after BHP (ASX:BHP) and the supervisors’ union at its Escondida mine in Chile said on Wednesday they struck a deal, avoiding a strike at the world’s largest copper mine.
Chilean miner Antofagasta (LSE:ANTO) on Thursday reported a 7% rise in third-quarter copper production and maintained its annual outlook despite a strike by unionised workers at its Centinela mine.
Adding to the downside pressure was data on Wednesday that showed US consumer prices accelerated in September, putting a rate hike later this month back on the radar.
A selloff in Asian tech stocks also weighed on the metals market.
The most-traded copper contract on the Shanghai Futures Exchange dropped 1.9% to ¥108,940 ($23,553) a tonne.
“For copper, it’s a double whammy of the AI trade coming under pressure from the selloff in chip stocks, and the impact of rising Fed rate hike odds,” said Kyle Rodda, senior financial market analyst at Capital.com.
LME aluminium added 0.1% to US$2,990.50 a tonne, recovering after earlier touching its lowest level in more than nine months at US$2,953.50.
“Shipments are starting to come through from the Middle East and the technicals don’t look terribly healthy, attracting some additional momentum selling,” Hansen said.
Among other metals, zinc fell 1.1% to US$3,678.50 a tonne, lead lost 0.6% to US$1,884.50, nickel slid 1.7% to US$15,250, and tin gave up 0.7% to US$50,100 after hitting its lowest level since June.
(Reporting by Eric Onstad; Additional reporting by Ashitha Shivaprasad in Bengaluru; Editing by Vijay Kishore and Joyjeet Das)
Main image: London Metal Exchange
