DRC Export Ban Sparks Copper Price Volatility Amid Rate Hike Expectations

The Democratic Republic of Congo (DRC) announced a ban on exports of copper and cobalt concentrates, sparking supply concerns that briefly pushed LME copper prices higher. However, rising rate hike expectations due to strong inflation data weighed on copper prices, causing them to retreat after a rapid rise.

LME copper opened at $14,268/mt overnight and edged up to $14,270/mt after the open, but then consolidated and pulled back to a low of $14,055/mt. It closed at $14,092.5/mt, down 0.40%. The most-traded SHFE copper 2609 contract opened at 108,130 yuan/mt, touched a high of 108,250 yuan/mt, and a low of 107,310 yuan/mt, before closing at 108,160 yuan/mt, up 0.36%.

US initial jobless claims stayed below 200,000 for the third straight week, indicating a resilient labor market. However, sources suggested that strong inflation data could lead to a rate hike in September, which put pressure on copper prices and pulled them back. Geopolitical uncertainty due to Iran's proposed navigation agreement for the Strait of Hormuz also added to the market's volatility.