Copper Slumps as Higher Interest Rates Dent Demand Expectations

Copper prices continued to fluctuate on Thursday, weighed down by rising interest rate expectations. The metal's demand is under pressure due to a potential increase in interest rates, as indicated by hotter-than-expected US economic data.

The benchmark three-month copper price on the London Metal Exchange dropped 0.22% to $14,586.5 per metric ton by 0317 GMT. Meanwhile, the most-traded copper contract on the Shanghai Futures Exchange fell 0.52% to 110,750 yuan ($16,494.89) a ton.

Analysts at Chinese broker Galaxy Futures point out that interest rate expectations have been boosted by economic data showing US business activity rose to a more than five-year high in September. This has increased the likelihood of higher interest rates, with rate traders now pricing in a 72% chance that the US Federal Reserve will increase interest rates again in its October meeting.