Copper slips on selloff in equities and rate hike fears, aluminium extends decline
Oct 15 (Reuters) - Copper slipped on Thursday, pressured by a selloff in the equities markets and concerns about further interest rate hikes, while aluminium prices fell for a third straight session.
Benchmark three-month copper on the London Metal Exchange fell 1.2% to $14,315.50 a metric ton by 0700 GMT after hitting a three-week peak in the previous session.
The most-traded copper contract on the Shanghai Futures Exchange was down 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 following yesterday's hot inflation data," said Kyle Rodda, senior financial market analyst at Capital.com.
But, "the market is still fundamentally well supported," he added.
Stocks sold off in Asia with the tech supply chain bearing the brunt of the damage after stronger-than-expected US inflation data. MKTS/GLOB
US consumer prices accelerated in September as gasoline costs surged, putting a rate hike later this month back on the radar. The Federal Reserve raised its policy rate in September to a target range of 3.75%-4.00%.
Higher interest rates can dampen economic activity, putting pressure on demand for industrial metals.
On the supply front, two unions kicked off the strike at Centinela mine in Chile a week ago after collective contract negotiations with mine owner Antofagasta Minerals failed. Chilean state miner Codelco partially suspended operations at its El Teniente mine on Sunday after a fatal landslide.
LME aluminium was down 0.9% at $2,961, its lowest level in more than nine months. SHFE aluminum fell 1.3% to 23,040 yuan ($3,442.35), after touching its lowest since July 21.
Among other LME metals, zinc
Among SHFE metals, zinc dipped 1.1%, lead fell 0.7%, nickel lost 2.1%, and tin fell 3.3% after hitting its lowest level since April.
($1 = 6.6931 Chinese yuan renminbi)