Copper Prices Plummet as Rate Hike Bets Skyrocket
Copper prices have dropped as spreads loosen and traders increase bets on US interest rate hikes.
The three-month futures contract fell by as much as 1.6% to $14,018.50 a tonne, the lowest in over three weeks, due to rising inventories in the London Metal Exchange's warehouse network.
Recent data showed an 8,425-tonne increase in copper stocks, which has eased concerns about supply shortages and led to a narrowing of price spreads between global benchmark prices and those on New York's Comex.
The gap between cash contracts and three-month futures narrowed to $45 a tonne, a stark reversal from August when the spread reached a premium of $545 a tonne in a condition known as backwardation that signals tight supply.
Copper and other metals are facing broader pressures due to rising interest rate hike bets ahead of the Federal Reserve's policy meeting this week.