Copper has fallen more than one per cent as the US dollar has risen after Federal Reserve chair Jerome Powell pledged to stick with gradual increases in US interest rates despite the added stimulus of tax cuts and government spending.
Powell’s debut testimony before Congress had been eagerly awaited by financial markets hungry for any clues on the outlook for US monetary policy after years of stimulus.
The dollar hit a two-week high against a basket of currencies after his comments shored up expectations that the Fed will press ahead with rate increases, weighing on assets priced in the US currency.
‘The dollar trends are really influencing prices, especially of copper,’ ABN Amro analyst Casper Burgering said.
‘On the fundamental side, there are few real indicators. China has just returned from its holiday and the market is still not quite (back to normal) yet. The non-fundamental drivers are pushing prices at this stage.’
ICBC Standard Bank said in a note on Tuesday it still saw a positive fundamental outlook for base metals, forecasting across the board deficits in 2018 and through to 2020.
* COPPER PRICES: London Metal Exchange copper closed down 1.3 per cent at $US7,021 a tonne, off an earlier two-week low of $US6,988.50 a tonne.
* COPPER SPREADS: The discount for cash over three-month copper contracted to its narrowest in six weeks on Tuesday at $US32.25, from $US42.25 a week ago.
* ALUMINIUM PRICES: LME aluminium ended the day up 0.4 per cent at $US2,147 a tonne.
* ALUMINIUM TECHNICALS: LME aluminium may test support at $US2,131 a tonne, a break below which could cause a loss to the next support at $US2,108, Reuters technical analyst Wang Tao said .
* ALUMINIUM SPREADS: Nearby aluminium spreads are under intense pressure, reflecting tightness in short-dated supply. The cost to roll aluminium for a day hit its highest since late 2016 on Monday at $US11 and remains elevated at $US10 a tonne.
* ALUMINIUM STOCKS: On-warrant aluminium stocks, or those not earmarked for delivery, in London Metal Exchange warehouses fell by 23,425 tonnes to 1,085,175 tonnes, exchange data showed, pulling back from a recent 11-month high.
* ALUMINA OUTPUT: Norwegian aluminium maker Norsk Hydro has been told by a Brazilian regulator to cut output from its Alunorte alumina refinery by 50 per cent until it complies with an order to safeguard the environment, the company said .
* OTHER METALS: LME zinc finished down 1.3 per cent at $US3,487 a tonne. Lead closed 0.2 per cent lower at $US2,576 a tonne, tin ended up 0.5 per cent at $US21,725 and nickel closed down 0.6 per cent at $US13,840 a tonne.