Industrial metals have been experiencing a downturn due to the anticipation of the Federal Reserve's extended tight monetary policy and escalating risk-averse sentiment ahead of China's Golden Week. The robust U.S. dollar and bond yields, bolstered by the Federal Reserve's hawkish stance, are exerting pressure on copper prices.
Thursday saw a drop in iron ore futures in Singapore while copper, nickel, and aluminum prices remained stable on the London Metal Exchange. The upcoming holiday is projected to decelerate China's domestic consumer demand, which is likely to impact the metals market.
In addition to the holiday slowdown, China's housing market slump and the suspension of China Evergrande (HK:3333) Group's shares in Hong Kong are posing substantial risks to Beijing's economic outlook and demand for metals.
The current scenario paints a picture of uncertainty for industrial metals, with factors such as the Federal Reserve's monetary policy, China's Golden Week, and the housing market slump all playing a role in shaping the market dynamics.
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