Copper hits 10-day low on profit-taking as supply worries ease

By Reuters News

By Eric Onstad

- Copper prices eased to their weakest in 10 days on Thursday, hit by profit-taking on reduced worries about supply, a sell-off in AI stocks, along with concerns about rising inflation and interest rates.

Benchmark three-month copper on the London Metal Exchange shed 1.2% to $14,314 a metric ton by 1030 GMT after touching the lowest since October 5 at $14,289.

"Two things are happening at the same time: the easing worries of supply and the strong inflation report," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"That was too much for the market to chew in one go and some profit-taking is emerging."

The technical outlook was also deteriorating, with copper challenging an uptrend that began in March and also edging below the 50-day moving average, he added.

Investors were less worried about mine disruptions after BHP BHP.AX and the supervisors' union at its Escondida mine in Chile said on Wednesday they struck a deal, avoiding a strike at the world's largest copper mine.

Chilean miner Antofagasta ANTO.L on Thursday reported a 7% rise in third-quarter copper production and maintained its annual outlook despite a strike by unionized workers at its Centinela mine.

Adding to the downside pressure was data on Wednesday that showed US consumer prices accelerated in September, putting a rate hike later this month back on the radar.

A sell-off in Asian tech stocks also weighed on the metals market. MKTS/GLOB

The most-traded copper contract on the Shanghai Futures Exchange dropped 1.9% to 108,940 yuan ($16,276.46) a ton.

"For copper, it's a double whammy of the AI trade coming under pressure from the sell-off in chip stocks, and the impact of rising Fed rate hike odds," said Kyle Rodda, senior financial market analyst at Capital.com.

LME aluminium slipped 0.1% to $2,984 a ton after touching its lowest level in more than nine months.

"Shipments are starting to come through from the Middle East and the technicals don't look terribly healthy, attracting some additional momentum selling," Hansen said.

Among other metals, zinc fell 1.2% to $3,673 a ton, lead lost 0.7% to $1,883, nickel slid 2.4% to $15,135, and tin slipped 1% to $49,920 after hitting its lowest level since June.


($1 = 6.6931 Chinese yuan renminbi)

Capital Com is an execution-only service provider. The present material must be regarded as marketing communication and should not be interpreted as investment research or investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page, then you do so entirely at your own risk