Copper Falls as Higher Interest Rates Loom

Copper prices dropped on Thursday after hotter-than-expected US economic data released the previous day raised concerns about higher interest rates, which could reduce demand for the red metal.

Benchmark three-month copper on the London Metal Exchange was down 0.22% at $14,586.5 a metric ton by 0317 GMT.

The US business activity rose to a more than five-year high in September, increasing pressure on copper prices, according to analysts at Chinese broker Galaxy Futures.

Rate traders are now pricing in a 72% chance that the US Federal Reserve will increase interest rates again in its October meeting, up from 49% a week earlier, according to the CME’s Fedwatch tool.