By Brijesh Patel

May 3 (Reuters)London copper and aluminium prices fell to three-month lows on Tuesday, as COVID-19 restrictions in top consumer China and the prospect of aggressive U.S. rate hikes fuelled worries about weaker global growth hitting metals demand.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was down 1.7% at $9,608.50 a tonne, as of 0737 GMT, after touching its lowest since Jan. 31 earlier in the session.

LME aluminium CMAL3 fell 0.9% to $3,024.50 a tonne, after hitting its lowest since Feb. 3. Zinc CMZN3 lost 2.1% to $4,021, while lead CMPB3 rose 0.5% to $2,271.50 and tin CMSN3 gained 0.6% to $40,495.

The Shanghai Futures Exchange is closed for a public holiday.

“The Fed is about to embark on an aggressive rate hike tangent at a time when both China and EU economies are set to struggle, which is not great for copper prices especially with China expected to be in a protracted lockdown,” said Stephen Innes, managing partner at SPI Asset Management.

The U.S. central bank’s Federal Open Market Committee will begin its meeting on interest rates later in the day and is widely expected to hike borrowing costs by half-a-percentage point when it announces its decision on Wednesday.

Beijing is banking on mass testing to locate and isolate infections and avert a Shanghai-like lockdown. The Chinese capital of 22 million people tightened COVID curbs over the five-day Labour Day holiday that runs through Wednesday.

Recent weak economic readings out of the world’s second-largest economy also raised concerns over global growth expectations.

COPPER: Peruvian indigenous communities occupying a key copper mine will agree to talks with officials and company representatives only if the government lifts its emergency order for the region, leaders of the groups told Reuters on Monday.

DOLLAR: The dollar =USD held just below a 20-year high against its rivals, making greenback-denominated metals more expensive for buyers using other currencies. USD/

COLUMN-Copper, iron ore yet to reflect China’s weakening industrial outlook, said Reuters columnist Clyde Russell.


* Wall Street ended a volatile trading day higher on Monday and benchmark U.S. Treasury yields breached the 3% mark as investors braced for a widely anticipated U.S. Federal Reserve interest rate hike. .NMKTS/GLOB

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

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Source: Nasdaq


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