Feb 14 (Reuters) – Prices of most non-ferrous metals eased on Wednesday, weighed down by a stronger dollar after hotter-than-expected U.S. inflation data dampened expectations for early interest rate cuts from the Federal Reserve.
Three-month copper on the London Metal Exchange CMCU3 was down 0.8% at $8,195.50 a metric ton, as of 0531 GMT.
The dollar traded near three-month highs against major peers as traders pushed back bets for a first Fed rate cut following surprisingly hot U.S. inflation figures overnight. USD/
A stronger U.S. currency makes dollar-priced metals more expensive for holders of other currencies.
“Base metals prices are trading lower due to strong U.S. CPI numbers which weighed on expectations of sooner and deeper rate cuts,” ANZ analyst Soni Kumari said.
Federal funds futures currently price in no rate cut in March and a lower than 50% chance of easing in May, according to LSEG’s rate probability app.
Data on Tuesday showed U.S. consumer prices increased more than expected in January amid rises in the costs of shelter and healthcare.
Copper, widely used in power and construction, is down more than 4% this month on concerns about demand from top consumer China and its property sector in particular, though activity is muted this week as China celebrates the Lunar New Year.
“We remain positive on copper due to renewed supply challenges. Tight concentrate market, created by recent mine closures, have seen smelter processing fees falling sharply,” ANZ’s Kumari said.
“Following years of relentless growth, Chinese smelters are now being forced to postpone new plants, bring forward maintenance and even cut production outright amid heavy financial losses. This could impact refined copper production.”
In other metals, LME aluminium CMAL3 slipped 0.6% to $2,212 a ton, nickel CMNI3 was steady at $16,270, zinc CMZN3 fell 0.7% to $2,299.50, while lead CMPB3 rose 0.4% to $2,005. Tin CMSN3 dropped 1.4% to $27,200.
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(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Mrigank Dhaniwala)
