Copper Inches Up as Tech Rally and Easing Rate Hike Bets Counter Dollar Strength

Copper prices edged higher on Tuesday, supported by a tech-fueled rally in US stocks and reduced expectations of an interest rate hike by the Federal Reserve this month. However, gains were limited by a stronger US dollar, which typically makes dollar-denominated commodities more expensive for international buyers. The benchmark three-month copper contract on the London Metal Exchange rose 0.08% to $14,431.5 per metric ton, marking its third consecutive day of gains. Meanwhile, the Shanghai Futures Exchange remained closed for China’s National Day and is set to reopen on October 8.

Asian stock markets followed the previous day’s gains in the US, particularly in the tech-heavy Nasdaq, which closed at a record high. Copper, often referred to as Dr Copper due to its sensitivity to global economic conditions, has seen demand boosted by expectations tied to AI infrastructure, electric grid upgrades, and electric vehicles. Rate traders now assign only a 24% probability to a Fed rate hike in October, down from 71% a week earlier, according to the CME’s FedWatch tool.

The US dollar continued its upward trend, supported by rising US Treasury yields, which weighed on greenback-denominated commodities. Aluminum prices climbed 0.16%, though they have dropped over 17% since reaching a four-year high in June due to easing supply concerns and new production capacity in Indonesia. Data from Indonesia’s statistics bureau showed that the country exported more than 150,000 tons of primary and unwrought alloyed aluminum in August, a significant increase from the previous year.

Among other metals traded on the LME, zinc slipped 0.08%, lead fell 0.03%, nickel lost 0.44%, and tin remained steady.