Copper futures moved lower as markets reacted to a more hawkish monetary policy outlook.
The decline followed Wednesday’s Federal Reserve meeting, where policymakers signalled expectations of further interest rate increases, pushing Treasury yields higher and creating a less supportive environment for copper.
On the supply side, Rio Tinto resumed exports from its Oyu Tolgoi mine in Mongolia following a brief disruption. As one of the world’s largest copper operations, the return of normal shipments could place additional selling pressure on the metal.
However, demand signals from China, the world’s largest consumer of the industrial metal, remain supportive, which could help limit downside risks. Industrial production growth accelerated in May, driven by stronger manufacturing activity of electrical equipment, transportation equipment, and technology-related products.
At the same time, prices remain near their highs, supported by structural drivers such as demand for electrification, artificial intelligence infrastructure and energy transition. Investments in these fields are expected to provide support for copper over the longer term.
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