Copper price fell on Friday to the lowest in nearly two months on a strong dollar and fears of recession-hit metals demand after further increases to interest rates.
The Federal Reserve has pushed interest rates to the highest level in almost 15 years as it fights to rein in soaring prices.
The US central bank announced on Wednesday it was raising its key rate by another 0.75 percentage points, lifting the target range to between 3% and 3.25%.
Copper for delivery in December fell 3.89% from Thursday’s settlement price, touching $3.33 per pound ($7,458 per tonne).
[Click here for an interactive chart of copper prices]
“The macro outlook is hitting industrial metals quite hard. The main worry is that central banks will allow the economy to slip into recession in an attempt to bring inflation under control,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“Now copper has broken below $7,475 a tonne, traders will be eyeing the $6,955 20-month low touched on July 15,”
The dollar climbed to its highest in two decades, making commodities priced in the US currency more expensive for buyers using other currencies.
Tight supply and rising demand in China, however, have supported metals prices recently.
“Power grid and new energy sectors have raised their orders for copper products,” one China-based copper producer said.
(With files from Reuters)