Copper prices retreated on Wednesday after touching their highest in nearly two weeks due to a resurgent dollar and persistent worries that rate hikes will hit demand.
Copper for delivery in December fell 0.4% from Tuesday’s settlement price, touching $3.47 per pound ($7,634 per tonne).
“The backdrop is still grim. The Fed is still determined to go after inflation and China’s economy is still struggling,” said Tom Price, head of commodities strategy at Liberum.
“For over a year, the Fed has not budged from its focus to curb inflation. Its hawkish message has never changed. And yet the market keeps hoping that there might be some kind of switch or relief.”
Also undermining copper was news of a possible labor deal in a mandatory mediation process to avoid a strike at Antofagasta Minerals’ Los Pelambres copper mine.
Global copper smelting edged up in September but remained below the two-year average as negotiations ramped up between smelters and miners for treatment charges, data from satellite surveillance of metal processing plants showed on Wednesday.
Weaker smelting activity in China was mainly behind the lackluster readings, according to a joint statement from commodities broker Marex and SAVANT, the satellite analytics service Marex launched with Earth-i in 2019.