(June 29): Copper fell as the Federal Reserve’s hawkish stance and a rising US dollar continued to weigh on sentiment toward industrial metals.
Three-month futures dropped toward U$13,300 a tonne in London, following two weekly declines. Fed policymakers have signalled growing support for interest-rate hikes in the coming months to combat sticky US inflation. That stance tends to aid the US currency, posing a headwind for raw materials.
Fed Bank of Richmond President Tom Barkin warned on Sunday inflation was too high, although he did see tentative signs that price pressures may moderate soon. A report last week showed the personal consumption expenditures index rose 4.1% in the year through May, the most since April 2023.
Copper is on track for a monthly loss of more than 2% in June after posting a record close the month before. Traders are tracking the outlook for US monetary policy, with a gauge of the US currency hitting the highest since November last week. US trade policy is also in focus amid expectations the Trump administration may opt to impose a levy on flows of refined metal.
A strong dollar will remain in place amid resilient US economic data, pressuring base metals, said Harry Jiang, a trader at China-Base Ningbo Group Co.
Elsewhere, Goldman Sachs Group Inc said it saw the Iran conflict ultimately aiding metals demand. An increased reliance on electric vehicles, further investments in renewable power, higher defence spending and growing competition to win the artificial-intelligence race are themes that would support copper demand, analysts including Samantha Dart said in a note.
See also: Aluminium falls to lowest since February as dollar strengthens
The bank recently raised its end-2026 and average-2027 copper forecasts to US$13,735 a tonne and US$13,800 a tonne respectively.
Copper fell as much as 0.7% to US$13,267.50 a tonne on the London Metal Exchange and traded at US$13,330 at 10.33am in Shanghai. Other metals were flat to higher, with aluminium steady and nickel up 0.6%. In Singapore, iron ore declined 1% to US$97.75 a tonne.
Uploaded by Arion Yeow
