Copper slips on rate hike fears, aluminium extends decline

By Reuters News

Oct 15 (Reuters) - Copper slipped on Thursday amid concerns that persistent inflation could prompt further interest rate hikes, while aluminium prices fell for a third straight session.

Benchmark three-month copper on the London Metal Exchange fell 0.4% to $14,427.50 a metric ton by 0201 GMT after hitting a three-week peak in the previous session.

The most-traded copper contract on the Shanghai Futures Exchange was down 1.1% to 109,760 yuan ($16,401.67) a ton.

"The gains (in copper) were supported by the threat of strikes in Chile. However, the prospect of tighter monetary policies saw the metal give up those gains," said Daniel Hynes, senior commodity strategist at ANZ.

US consumer prices accelerated in September as gasoline costs surged, putting an interest rate increase 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 0.6% at $2,969, its lowest level in more than nine months. SHFE aluminum fell 1.5% to 22,995 yuan ($3,436.19), its lowest since July 21.

Among other LME metals, zinc fell 0.6% to $3,696.50, lead rose 0.1% to $1,897.50, nickel eased 0.3% to $15,460, and tin fell 0.5% to $50,080 after hitting its lowest level since June.

Among SHFE metals, zinc slipped 0.8%, lead fell 0.7%, nickel lost 1.2%, and tin fell 3.4% after hitting its lowest level since April.

($1 = 6.6920 Chinese yuan renminbi)

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