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Copper prices retreat as Fed rate hike jitters offset demand prospect
Three-month copper on the London Metal Exchange was down 0.9% to $7,493 a tonne by 0734 GMT, reversing gains from Thursday.
By Siyi Liu and Dominique Patton
London copper slid on Friday, as fears over another interest rate hike by the U.S. Federal Reserve in November offset a solid demand outlook.
Three-month copper on the London Metal Exchange was down 0.9% to $7,493 a tonne by 0734 GMT, reversing gains from Thursday.
Overnight U.S. data showing a persistently tight labour market, and hawkish comments from Fed officials bolstered concerns about the Fed hiking rates and potentially tilting the economy into a recession.
"Again, fears of interest rate rises dampened risk appetite," a China-based futures trader said. "But the tight supply and solid demand could prevent it from any sharp fall."
The global copper market is expected to see a deficit of about 325,000 tonnes this year and a surplus of 155,000 tonnes in 2023, the International Copper Study Group said on Wednesday.
Freeport-McMoRan executives gave a bullish demand outlook of copper due to its use in renewable energy products and said none of its customers have scaled back orders.
The most-traded November copper contract on the Shanghai Futures Exchange rose 1% to 62,820 yuan ($8,670.45) a tonne.
Copper inventories in SHFE warehouses rose 40.5% on-week to 25,820 tonnes on Friday.
Also weighing on investors' cautiousness was the ongoing the ongoing Communist Party Congress, which will end this weekend.
Market will be holding off as they await any possible last-minute announcements or shift in policies especially on COVID or stimulus, Marex Metals said in a note.
On Thursday, Bloomberg News reported that China is considering a cut in the duration of quarantine for inbound visitors from 10 to seven days.
SHFE zinc lost 1.9% to 24,640 yuan a tonne, tin fell 2.7% to 164,100 yuan a tonne, while aluminium gained 0.7% to 18,535 yuan a tonne.
LME aluminium climbed 0.7% to $2,225 a tonne, while tin fell 3% to $18,770 a tonne, nickel was down 2.3% to $21,680 a tonne.
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