LONDON (Reuters) - Copper hit its lowest in more than a month and nickel slid as much as 6 percent on Thursday after the Federal Reserve raised expectations of another U.S. interest rate hike this year, boosting the dollar.
The Fed said on Wednesday it expected one more increase by the end of the year, driving the dollar to a two-month high versus the yen on Thursday and making dollar-priced metals costlier for non-U.S. investors. [FRX/]
“The losses are mostly currency driven. The dollar was the main culprit behind the August gains so now to see a higher dollar is pounding all the metals,” said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.
But he said copper prices could rise. “On the fundamental side demand is not booming (but) supplies have been reduced, so we don’t need such strong demand to put the metal in deficit,” he said.
LME COPPER: London Metal Exchange copper closed down 0.7 percent at $6,480 a ton. Prices earlier fell to $6,427.50, the weakest since mid-August.
CHARGES: China’s top copper smelters have raised the floor for fourth-quarter treatment and refining charges by as much as 10 percent.
COPPER DEFICIT: The global world refined copper market showed a 70,000 ton deficit in June, compared with a 50,000 ton deficit in May.
NICKEL: The Shanghai Futures Exchange (ShFE) said it would triple the transaction fee on its nickel contract for January 2018 delivery in its latest bid to snuff out speculators. LME nickel fell by more than 6 percent during the session but ended down 3.3 percent at $11,005 a ton.
LME ALUMINUM: LME aluminum eased from five-year highs reached the previous session to finish down 0.3 percent at $2,171 a ton but expectations of tighter supply into early next year underpinned prices.
CHINA ALUMINUM PRODUCTION: Production cuts are already feeding through into lower output from the world’s top producer of the metal after Beijing’s campaign to close illegally built capacity earlier this year.
Total Chinese production in August was 2.64 million tonnes, compared with 2.686 million tonnes in July, the International Aluminum Institute said.
ZINC: Benchmark zinc, used to galvanize steel, closed down 1 percent at $3,101 after Chinese iron ore futures tumbled nearly 5 percent, reflecting oversupply concerns in top consumer China.
PRICES: Lead ended up 2.2 percent at $2,513 a ton and tin finished 0.9 percent lower at $20,450.
Additional reporting by Peter Hobson and Melanie Burton; Editing by Mark Potter and Adrian Croft