London copper fell to a fresh 20-month low on Wednesday, as an elevated US dollar, renewed COVID-19 restrictions in top consumer China and fears of rapid interest rate hikes stifled demand.
Three-month copper on the London Metal Exchange was down 0.6 percent at $7,312 a ton, after hitting its lowest since Nov. 23, 2020 at $7,202.50 earlier in the session.
The most-traded August copper contract on the Shanghai Futures Exchange fell 3.4 percent to 55,960 yuan ($8,386.24) a ton by midday break.
“The market was gripped by fears of slower economic growth. Expectations of another increase in inflation rose ahead of the release of US Consumer Price Index data,” ANZ commodity strategists said in a note.
“This is driving fears the US Federal Reserve will plough ahead with another 75bp rate hike. This was exacerbated by further lockdowns in China.”
Economists polled by Reuters expect US inflation accelerated to 8.8 percent on an annual basis, a 40-year peak.
Investors also held back from making large bets ahead of China’s macroeconomics data scheduled for release on Friday to determine the health of the world’s second-largest economy.– Reuters
