Copper Prices Creep Higher Amid China Supply Crunch and Rate Hike Fears

Copper prices are inching up as a softer US dollar and supply chain issues in China combine to push prices higher. However, concerns about interest rate hikes are keeping traders cautious.

The three-month copper price on the London Metal Exchange (LME) rose by 0.2% to $14,645 per metric ton, with a weaker dollar making dollar-priced commodities cheaper for buyers outside the US.

But the bigger story is the tight supply in China, where smelters are trimming output for maintenance, resulting in a sharp fall in visible inventories. This can lead to higher costs for manufacturers when they need metal delivered quickly, even if the LME price doesn't move much day to day.