Copper prices on the LME slipped in Asian trade, weighed by potentially lackluster demand, though expectations of U.S. interest rate cuts capped losses.

Three-month copper on the London Metal Exchange dipped 0.1% to $10,002.5 per metric ton, as of 0705 GMT, while the most-traded copper contract on the Shanghai Futures Exchange gained 0.56% to 80,130 yuan ($11,251.37) a ton.

Despite the peak season for consumption approaching, the terminal margin has weakened, which may indicate a sluggish peak season, said broker Galaxy Futures.

Tamer-than-expected U.S. producer price inflation data strengthened expectations for interest rate cuts, while eyes remain on Thursday’s consumer price inflation data for more cues on the Federal Reserve’s rate trajectory.

The dollar index, which measures the U.S. currency against six major peers, was flat at 97.84, following the unexpected decline in U.S. factory-gate prices.

Typically, lower interest rates from the Fed weaken the U.S. dollar. As the dollar declines, dollar-denominated metals become cheaper for buyers using other currencies, which can support increased demand.

Top global miner BHP’s focus on expanding its own copper assets means that it is unlikely to pounce on the planned merger between Anglo American and Teck Resources.

In the past year, BHP invested $2 billion for a stake in Canada’s Lundin, gaining access to two copper projects in Argentina, while also working to boost production at top copper mine Escondida in Chile.

Among other London metals, aluminium edged up 0.38% to $2,635 a ton, lead gained 0.03% to $1,987.5, and tin increased 0.08% to $34,635, while nickel lost 0.3% to $15,100, and zinc eased 0.09% to $2,884.

SHFE aluminium climbed 0.63% to 20,915 yuan, lead rose 0.36% to 16,900 yuan, tin gained 0.66% to 271,260 yuan, zinc increased 0.36% to 22,250 yuan, and nickel gained 0.11% to 120,620 yuan.
Source: Reuters