Base metals are trending lower on Chinese inflation data and a strong dollar

Base metals are trending lower on Chinese inflation data and a strong dollar
Base metals are trending lower on Chinese inflation data and a strong dollar

Prices of copper and most other base metals were trending lower on Wednesday after disappointing inflation data from China and a stronger U.S. dollar.

Three-month copper on the London Metal Exchange slipped 0.2% to $9,853 a metric tonne by 0726 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange fell 1% to 79,580 yuan ($10,937.78) a tonne.

Consumer prices in China rose for a fifth month in June but missed expectations, while producer price deflation persisted.

The consumer price index (CPI) rose 0.2 percent in June from a year earlier, compared with a 0.3 percent increase in May, the weakest in three months, data from the National Bureau of Statistics showed on Wednesday, below the 0.4 percent rise forecast in a Reuters poll.

The strengthening dollar also weighed on the market after Federal Reserve Chairman Jerome Powell struck a cautious tone on the timing of interest rate cuts.

A stronger dollar makes it more expensive to buy the raw material whose price is fixed by the greenback.

Meanwhile, China produced 1.01 million tonnes of refined copper in June, down slightly from May due to smelter maintenance. However, the figure was higher than expected and rose 9.5 percent from a year earlier, according to a survey by Shanghai Metals Market.

Major Foundries in China

hoped for improvements

of raw material supply during the third quarter.

LME aluminium was down 0.5% at $2,483.50 a tonne, nickel lost 0.2% to $17,110, zinc slipped 0.3% to $2,923 and tin was little changed at $34,360, while lead was down 0.1% at $2,191.50.

SHFE aluminum lost 1.5 percent to 20,100 yuan per ton, lead fell 1.1 percent to 19,430 yuan, nickel fell 2.9 percent to 133,740 yuan, zinc fell 1.3 percent to 24,120 yuan, and tin fell 0.1 percent to 277,240 yuan.

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($1 = 7.2757 Chinese yuan renminbi) (Reporting by Siyi Liu and Mei Mei Chu; Writing by Rashmi Aich and Savio D’Souza)

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