Copper prices extended their decline on Thursday, heading for a third straight daily loss as U.S. inflation data boosted the dollar and raised the likelihood of a Federal Reserve rate hike. Comex copper for December delivery fell 1.2% to $6.5810 a pound in New York trading, marking its longest losing streak since June. The decline comes after the Bureau of Labor Statistics reported a 0.6% rise in consumer prices in September, pushing the annual inflation rate to 3.7%. Core CPI, which excludes food and energy, also exceeded expectations, rising 0.3% for the month and 2.6% year-over-year.
The inflation report lifted the Bloomberg Dollar Index to its highest level since May 2025, increasing the probability of an October rate hike to around 50% before easing slightly. The dollar's strength has been a key factor in copper's decline, as a stronger dollar makes the metal more expensive for holders of other currencies. In London, the three-month copper contract slipped 0.9% to $14,360 a tonne, while Shanghai Futures Exchange's most-active copper contract fell 1.9% to close at 108,940 yuan a tonne.
Supply concerns eased slightly as supervisors at BHP's Escondida mine in Chile approved a deal, avoiding a potential work stoppage. However, strikes at Antofagasta's Centinela mine and a landslide-induced shutdown at Codelco's El Teniente mine continue to disrupt production. Copper producers also felt the pressure, with Freeport-McMoRan and BHP stocks falling 2.4% and 1.4% respectively. Antofagasta stock dropped 6.4% after the company revised its 2027 production forecast downward.
Analysts pointed to swelling Chinese stockpiles and elevated prices as factors curbing near-term demand. The inflation data follows the Fed's September rate increase, which took the benchmark funds rate to a range of 3.75% to 4%. Gasoline prices surged 9.1% in September, adding to inflationary pressures. Despite the recent declines, Comex copper is still up about 17% for the year.