Staff of Reuters 2 minutes Read this article (Updates throughout, changes dateline to LONDON) (Reuters) – LONDON, July 8 (Reuters) – Copper prices fell on Thursday after the Federal Reserve of the United States announced that it would tighten monetary policy sooner than expected. Copper prices have fallen from a record high of $10,747.50 per tonne set in May as a result of the Fed’s measures to limit market liquidity. By 1100 GMT, benchmark three-month copper on the London Metal Exchange (LME) had down 1.6 percent to $9,303. The Fed’s shift to a more hawkish attitude was signaled during its June policy meeting, which pushed the dollar higher and made assets priced in the greenback more expensive for non-dollar holders. “The (Fed’s) minutes witnessed a continuation of the sell-off that began on June 16 when the Fed surprised the market by bringing forward rate hike predictions,” said ING analyst Wenyu Yao. “The macro market has seen a collapse of reflation trade over the previous two weeks… which is putting a lot of pressure on commodities, particularly copper.” China raised hopes that it could soften monetary policy to support its economy, which Saxo Bank analyst Ole Hansen believes the market misinterpreted as a sign of weakness in the world’s top metals consumer. INVENTORIES: At 212,575 tonnes, total stockpiles in LME-registered warehouses are at their highest level in over a year. MCUSTX-TOTAL The LME cash contract is $33 per tonne lower than the three-month price, indicating ample supply. CMCU0-3ALUMINIUM: Russia’s plans to levy tariffs on aluminum exports, which are widely used in transportation and packaging, have pushed up spot market prices for customers in Europe and the United States. OTHER CHARGES: Aluminium down 1.9 percent to $2,453 a tonne on the LME, while zinc lost 1.9 percent to $2,927, lead declined 1% to $2,268, tin fell 0.4 percent to $31,580, and nickel fell 0.4 percent to $18,230. Zandi Shabalala contributed to this report. David Goodman did the editing./n
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