Copper prices slip as US Fed chief’s upbeat assessment boosts the greenback

LONDON — Copper prices slipped on Tuesday along with aluminum and nickel, pushed down by a stronger dollar and fears that demand will be damaged by a global trade war and weaker economic growth in top consumer China.

Benchmark copper on the London Metal Exchange (LME) closed 0.70% down at $ 6,152 a ton, near a one-year low of $6,081 reached on July 11 and down about 16% from early June.

Nickel and aluminum were at or near their lowest since April and zinc was close to a one-year nadir.

Negative sentiment was pushing down prices despite good supply and demand fundamentals, said Societe Generale analyst Robin Bhar.

“Every rally is being sold into,” he said. “It’s not clear whether we have bottomed out or if there’s another 10% on the downside.”

The stronger dollar pressured metals by making them more expensive for users of other currencies.

Upbeat comments from Federal Reserve Chairman Jerome Powell on Tuesday signaled that the US central bank will move ahead with interest rate rises, which in turn are likely to boost the dollar further.

Also supporting the greenback was US data showing a sharp rebound in manufacturing and gains in mining output that boosted industrial production in June.

Following data on Monday showing slightly slower growth for the second quarter in China, the country’s state planning agency said that a 2018 economic growth target of about 6.5% remains achievable. China is the world’s biggest consumer of metals. Monday’s data also showed the weakest expansion in factory activity for two years in June.

China said on Monday that it had filed a complaint to the World Trade Organization about Washington’s proposed tariff list on $200 billion worth of Chinese goods.

On-warrant copper inventories available to the market in LME-registered warehouses rose 4,175 tons to 225,975 tons, the highest in a month.

LME aluminum ended 1.1% lower at $2,032 a ton after touching $2,021.50 on Friday, the lowest since April 6 and down nearly 15% from early June. Nickel finished down 1.3% at $13,490 a ton after hitting its lowest since April 12 at $13,475. Zinc ended 1.5% up at $2,512 a ton, retracing some of its losses on Monday, while lead closed 0.40% down at $2,166 a ton and tin was bid flat at $19,500 a ton. —