The dollar hovered near a three-month high against other leading currencies after minutes of the Fed’s June policy meeting confirmed that the world’s biggest central bank is moving towards tapering asset purchases as soon as this year.
A stronger dollar makes dollar-priced metals more expensive for holders of other currencies.
Three-month copper on the London Metal Exchange (LME) declined 0.9% to $9,371.50 a tonne by 0705 GMT while the most-traded August copper contract on the Shanghai Futures Exchange edged up 0.1% to 68,740 yuan ($10,608.68).
Though rising copper treatment charges and the release of Chinese state reserves have pressured prices, China’s control of the COVID-19 pandemic and the infrastructure and new energy sectors will drive copper demand, said Huatai Futures in a report.
“However, due to ... the impact of possible tightening of central bank liquidity around the world, we maintain a relatively neutral view (for copper),” it added. FUNDAMENTALS
* LME aluminium fell 1.5% to $2,461 a tonne, lead fell 0.6% to $2,277 and zinc dropped 0.9% to $2,932.
* ShFE aluminium was down 0.7% at 18,755 yuan a tonne, while nickel rose 1.6% to 137,050 yuan and lead dipped 0.5% to 15,725 yuan.
* Plans by Russia to impose taxes on exports of aluminium, a vital material for transport and packaging, have fuelled a surge in spot market costs for consumers in Europe and the United States.
* China will use timely cuts in the bank reserve requirement ratio to support the real economy, especially small companies, the cabinet said on Wednesday.
* For the top stories in metals and other news, click or ($1 = 6.4796 yuan) (Reporting by Mai Nguyen in Hanoi Editing by David Goodman)