Most base metals fell in holiday trading Wednesday as the rising dollar made commodities more expensive for buyers holding other currencies.
Three-month copper on the London Metal Exchange (LME) was down 0.7% at $9,920 per metric tonne by 0715 GMT, and aluminum was down 0.6% at $2,576 per tonne.
LME lead slipped 0.2% to $2,213.50, nickel lost 0.5% to $19,150, and tin dipped 0.2% to $31,170 a tonne.
Several Asian markets, including China, the main consumer of metals, were closed for Labor Day.
The US dollar strengthened ahead of the Federal Reserve’s decision to keep interest rates unchanged amid stagnant inflation.
Base metals proponents are hoping for lower interest rates, which support metals prices thanks to a weaker dollar and faster economic growth.
However, rate cut expectations changed dramatically after the U.S. economy posted robust performance, Daria Efanova, an analyst at Sucden Financial, said in a note.
“Coupled with rising geopolitical tensions and the impending election season, concerns about persistent inflation have increased in major economies,” she added.
LME zinc fell 1.4% to $2,884 as supply concerns eased as Nyrstar’s Budel smelter resumes production during the week of May 13, and in partly due to the rise in refined zinc prices which have increased by almost a third since mid-February.
The global zinc market surplus widened to 40,100 tonnes in February, from 12,300 tonnes in January, bringing the surplus for the first two months of 2024 to 53,000 tonnes, compared to a deficit of 8,000 tonnes in from the same period last year.
The International Copper Study Group has reduced its supply surplus forecast for this year due to much lower than expected mine production.
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