Feb 14 (Reuters) – Prices of most non-ferrous metals
eased on Wednesday, weighed down by a stronger dollar after
hotter-than-expected U.S. inflation data dampened expectations
for early interest rate cuts from the Federal Reserve.
Three-month copper on the London Metal Exchange was
down 0.8% at $8,195.50 a metric ton, as of 0531 GMT.
The dollar traded near three-month highs against major peers
as traders pushed back bets for a first Fed rate cut following
surprisingly hot U.S. inflation figures overnight.
A stronger U.S. currency makes dollar-priced metals more
expensive for holders of other currencies.
“Base metals prices are trading lower due to strong U.S. CPI
numbers which weighed on expectations of sooner and deeper rate
cuts,” ANZ analyst Soni Kumari said.
Federal funds futures currently price in no rate cut in
March and a lower than 50% chance of easing in May, according to
LSEG’s rate probability app.
Data on Tuesday showed U.S. consumer prices increased more
than expected in January amid rises in the costs of shelter and
healthcare.
Copper, widely used in power and construction, is down more
than 4% this month on concerns about demand from top consumer
China and its property sector in particular, though activity is
muted this week as China celebrates the Lunar New Year.
“We remain positive on copper due to renewed supply
challenges. Tight concentrate market, created by recent mine
closures, have seen smelter processing fees falling sharply,”
ANZ’s Kumari said.
“Following years of relentless growth, Chinese smelters are
now being forced to postpone new plants, bring forward
maintenance and even cut production outright amid heavy
financial losses. This could impact refined copper production.”
In other metals, LME aluminium slipped 0.6% to
$2,212 a ton, nickel was steady at $16,270, zinc
fell 0.7% to $2,299.50, while lead rose 0.4% to $2,005.
Tin dropped 1.4% to $27,200.
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(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu and Mrigank Dhaniwala)
