Copper prices fell on Wednesday as fears of a rapid rise in interest rates, slowing economic growth and more sanctions on Russia dented risk appetite and pushed the dollar to its strongest level in almost two years.
Benchmark three-month copper on the London Metal Exchange (LME) was down 0.6% at $10,391 a tonne by 1058 GMT.
Aggressive comments from the US Federal Reserve “detracted from the rally,” Saxo Bank analyst Ole Hansen said. “The market is worried about the economic slowdown,” he added.
But copper, which is used in the energy and construction sectors, was hovering near an all-time high of $10,845 hit last month and Hansen predicted further price rises because supply is tight and more metal will be needed for decarbonization. of the world.
Global stock prices fell, US Treasury yields hit multi-year highs and the dollar strengthened as investors bet on an aggressive Fed tightening of monetary policy next month.
A stronger US currency makes metals priced in dollars more expensive for foreign buyers.
Expectations of new sanctions on Russian energy exports pushed up oil prices.
China, the biggest consumer of metals, is facing its most severe wave of COVID-19 since the Wuhan outbreak and Chinese manufacturing and services activity contracted in March.
German industrial orders fell more than expected in February, according to the data.