Base Metals Set for Weekly Loss on Demand Worry, Rate Cut Delay

February 02, 2024, 02.46 PM | Source: Reuters
Base Metals Set for Weekly Loss on Demand Worry, Rate Cut Delay

METAL COMMODITY - LONDON. Base metals prices largely fell on Friday and were set for a weekly decline amid mixed economic data globally and on signals that U.S. rate cuts will be delayed until later this year.

Three-month copper on the London Metal Exchange fell 0.7% to $8,474 per metric ton by 0707 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange dropped 1.1% to 68,630 yuan ($9,558.50) a ton.

On a weekly basis, both contracts were heading for a decline.

U.S. Federal Reserve Chair Jerome Powell ruled out a rate cut at the March meeting as market participants had previously hoped for.

"As interest rates have now been confirmed to remain higher for longer, commodities felt the brunt of this decision," said Sucden Financial analysts in a note.

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Meanwhile, global factories delivered a largely patchy performance at the start of 2024, surveys showed on Thursday, as new orders spurred momentum in the United States, but soft Chinese demand left Asia's economies on a shaky footing and disruption to Red Sea shipping delayed deliveries in Europe.

"Weaker industrial activity continues to be a drag for metal demand prospects in Q1. Nevertheless, we believe supply side issues should outweigh weaker demand," said ANZ analysts in a note, referring to the tightness in mined copper supply.

LME zinc on Friday dipped 0.6% to $2,464 a ton, lead dropped 0.4% to $2,143, tin declined 0.7% to $25,630, aluminium eased 0.5% to $2,235.50 while nickel advanced 0.2% to $16,260.

SHFE aluminium declined 1% to 18,810 yuan a ton, nickel eased 0.2% to 126,430 yuan, zinc dropped 1.6% to 20,715 yuan, tin slumped 1.8% to 214,010 yuan while lead rose 0.4% at 16,240 yuan.

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Editor: Wahyu T.Rahmawati

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