Base metals fall on fears of a US rate hike

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BEIJING — Base metal prices fell on Wednesday after a hotter-than-expected U.S. inflation report sparked fears of more aggressive Federal Reserve interest rate hikes that could dampen demand for the metals.

Three-month copper on the London Metal Exchange had fallen 0.7% to $7,817.50 a tonne by 0156 GMT, extending losses from the previous session.

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The most-traded copper contract in October on the Shanghai Futures Exchange slid 1.4% to 62,260 yuan ($8,941.55) a tonne.

Data released late Tuesday evening showed that consumer prices in the United States rose unexpectedly in August, with prices rising at an annual rate of 8.3%, not far from the four-decade peak reached in June.

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The dollar strengthened further after the CPI shock, posting its biggest daily percentage gain since 2020.

A strong dollar puts pressure on commodities priced in dollars by making them more expensive for holders of other currencies.

Tuesday’s data also sent stock and bond prices tumbling. Wall Street’s major indexes saw their biggest daily percentage declines since June 2020.

LME tin fell 3.6% to $20,620 a ton, zinc 0.4% to $3,215 a ton and aluminum 0.2% to $2,309.50 a ton.

Nickel ShFE fell 1.7% to 188,830 yuan per ton, tin lost 4.8% to 173,250 yuan per ton, aluminum fell 0.8% to 18,640 yuan per ton, zinc fell 0.2% to 24,760 yuan a ton and lead fell 1.1% to 14,975 yuan a ton. tonne.

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($1 = 6.9630 Chinese yuan) (Reporting by Siyi Liu and Dominique Patton; Editing by Subhranshu Sahu)