Copper Prices Inched Lower As Fed Raised Interest Rates

LME copper closed at $8,604/mt in overnight trading, a drop of 0.65%. Trading volume was 13,000 lots and open interest stood at 274,000 lots. The most active SHFE 2309 copper contract finished at 69,070 yuan/mt overnight, down 0.16%. Trading volume was 24,000 lots, and open at 187,000 lots.

On the macro front, the Federal Reserve raised interest rates by 25 basis points as scheduled, and Powell said at a subsequent press conference that inflation in the United States remained high. The hike raised the target range for the benchmark overnight rate to 5.25-5.50%, and the accompanying policy statement left the door open for another hike. Most of the downstream buyers stood on the sidelines, and the overall transaction was quiet. Downstream  buyers are expected to purchase as needed in the near term due to market caution.

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