METALS-London copper falls as U.S. rate-hike bets dent risk appetite

Jan 21 (Reuters) – London copper prices slipped on Friday as
risk sentiment soured with markets expecting the U.S. Federal
Reserve to aggressively raise interest rates this year, although
hopes of further policy support from China kept the metal on
track for a weekly gain.

An early rate hike from the U.S. central bank could trim
liquidity in financial markets and slow recovery in the world’s
biggest economy.

Three-month copper, often used as a gauge of global economic
health, on the London Metal Exchange was down 1.3% at
$9,860 a tonne, as of 0250 GMT. Prices, however, gained about
1.4% so far this week.

The most-traded March copper contract on the Shanghai
Futures Exchange rose 0.1% to 70,890 yuan ($11,176.10)
a tonne.

Investors’ attention is fixed on the U.S. central bank’s
policy meeting next week where the Fed is expected to tighten
monetary policy at a much faster pace than earlier thought to
tame persistently high inflation.

Top metals consumer China lowered mortgage lending benchmark
rates on Thursday, its latest effort to prop up the slowing
economy.

Elsewhere, nickel prices in Shanghai continued their rally
to record highs on dwindling inventories.

FUNDAMENTALS

* LME aluminium fell 1.8% to $3,055, lead
edged up 0.2% to $2,353.5, zinc dropped 1% to $3,610 and
tin eased 0.2% to $43,400. Nickel fell 1.1% to
$23,545 a tonne, but hovered closer to a more than a decade high
touched on Thursday.

* ShFE aluminium fell 0.7% to 21,330 yuan a tonne,
zinc eased 0.1% to 25,120 yuan, lead shed 0.5%
to 15,620 yuan and tin was down 0.2% at 329,300 yuan.
Nickel climbed 2.6% to 175,320 yuan a tonne, having hit
a record high of 178,330 yuan earlier in the session.

* Nickel stocks in LME-registered warehouses
were at their lowest since 2019 at 94,830 tonnes, compared with
264,606 tonnes in April 2021, inventories in Shanghai Futures
Exchange warehouses were near record lows last seen
in August 2021.

* The global nickel market saw a deficit of 3,000 tonnes in
November, compared with a shortfall of 1,600 tonnes a month
earlier, data from the International Nickel Study Group (INSG)
showed on Thursday.

* Global primary aluminium output fell 1.25% year-on-year in
December to 5.622 million tonnes, data from the International
Aluminium Institute showed on Thursday.

* For the top stories in metals and other news, click
[TOP/MTL] or [MET/L]

MARKETS NEWS

* The safe-haven yen gained versus the riskier Australian
dollar on Friday as risk sentiment soured amid rekindled fears
of heated inflation and aggressive Federal Reserve policy
tightening. [USD/]

* Asian share markets and U.S. futures fell on Friday, after
U.S. stocks took a knock overnight, hurt by lingering concerns
over the Federal Reserve’s tightening and weaker-than-expected
economic and earnings data. [MKTS/GLOB]

($1 = 6.3430 Chinese yuan)

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry
Jacob-Phillips)
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