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BEIJING — Most base metal prices in Shanghai rose on Wednesday, supported by expectations of stronger demand from China, but concerns of a global economic slowdown lingered ahead of an expected interest rate hike by the U.S. Federal Reserve.
The most-traded October copper contract on the Shanghai Futures Exchange closed up 0.5% at 62,760 yuan ($8,901.75) a tonne.
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Improved operation rates among end-user manufacturers in China are expected to bolster metals demand in September and October.
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The commercial hub of Shanghai on Tuesday announced eight infrastructure projects with a total investment of 1.8 trillion yuan, to revive a COVID-impacted economy.
ShFE nickel rose 3.9% to 202,000 yuan a tonne, tin rose 2.7% to 182,400 yuan a tonne, while ShFE aluminum lost 0.3% to 18,670 yuan a tonne, following data on Tuesday that showed global primary aluminum output rose 3.5% in August to 5.89 million tonnes.
However, buyers in the physical market were hesitant to replenish stocks as the Fed rate hike expectations poses downside risks for commodity prices, a metal trader said.
The Fed started a two-day meeting on Tuesday, with rate futures traders pricing in an 83% chance of a 75 basis-point hike and a 17% probability of a 100 bps raise.
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Spot premium for refined copper has declined 20% this week so far to 660 yuan a tonne, as assessed by Shanghai Metals Market.
The U.S. dollar strengthened to a near two-decade high, making it more expensive for holders of other currencies to buy greenback-priced commodities.
Three-month copper on the London Metal Exchange dipped 0.2% to $7,740.50 a tonne by 0713 GMT.
LME aluminum slid 0.2% to $2,242 a tonne, lead was down 0.6% to $1,869.50 a tonne, while nickel climbed 2.3% to $25,540 a tonne, zinc edged up 0.1% to $3,133 a tonne.
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($1 = 7.0503 Chinese yuan renminbi) (Reporting by Siyi Liu and Dominique Patton; editing by Devika Syamnath and Jason Neely)
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