Most base metals drop on rate-hike fears, China demand concerns
BEIJING — Most base metals declined on Wednesday, as hawkish messages from central banks kept investors on edge, and after the World Bank cut its economic growth outlook for top metals consumer China.
Three-month copper on the London Metal Exchange lost 1% to $7,278.50 a tonne by 0145 GMT, extending losses from the previous session.
The most-traded October copper contract on the Shanghai Futures Exchange dipped 0.5% to 60,850 yuan ($8,450.80) a tonne.
The U.S. Federal Reserve needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday, a more aggressive stance than he has previously embraced that underscores the central bank’s resolve to quash excessive inflation.
The Bank of England said late on Monday that it would not hesitate to change interest rates and was monitoring markets “very closely.”
Interest rate jitters sent the S&P 500 to its lowest level in almost two years on Tuesday.
Prices of copper, often used as an economic indicator, have fallen more than 25% so far this year, weighed down by the war in Ukraine, aggressive rate hikes and China’s strict COVID-19 curbs.
On Tuesday, the World Bank said China was projected to grow 2.8% this year, a significant deceleration from its previous forecast of 5.0%.
Falling demand in Europe has pushed Norwegian aluminum producer Norsk Hydro to cut output at two local plants, the company said on Tuesday.
LME aluminum fell 0.9% to $2,096 a tonne, zinc was down 0.3% to $2,852 a tonne and tin declined 0.8% to $20,520 a tonne.
ShFE aluminum dropped 1.7% to 17,955 yuan a tonne, zinc lost 1.8% to 23,915 yuan a tonne and nickel fell 2.7% to 180,270 yuan a tonne.
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($1 = 7.2005 Chinese yuan) (Reporting by Siyi Liu and Dominique Patton; Editing by Subhranshu Sahu)