(Updates prices)LONDON, Nov 17 (Reuters) - Copper prices fell for a thirdday on Wednesday as expectations of U.S. interest rate riseslifted the dollar to 16-month highs, making metals priced in thegreenback costlier for buyers with other currencies.
Benchmark copper on the London Metal Exchange (LME)was down 1.6% at $9,404 a tonne at 1723 GMT.
Prices of the metal, used in construction and to conductelectricity, hit a record high of $10,747.50 in May but havesince lost momentum as economic growth has slowed.The dollar was steady on Wednesday but has surged in thelast week as strong U.S. economic data and high inflation leadmany investors to expect a U.S. rate hike as early as mid-2022.That has dragged copper to its 200-day moving average, a keytechnical indicator currently at $9,408 a tonne, said Saxo Bankstrategist Ole Hansen.
"If we close below that level, we could see the marketreverse down to $9,000," he said, but added that prices wereunlikely to fall far because demand will rise as the worldbuilds infrastructure for electrification.
DEMAND: The world will need to double its copper supply andquadruple its nickel supply in the next 30 years to facilitate adecarbonised world, an executive at miner BHP said. SPREAD: A supply squeeze on the LME that pushed prices uplast month has faded, with copper moving into exchangewarehouses and the premium for cash copper over the three-monthcontract falling to $14.90 a tonne from over $1,100 last month.COLUMN: All eyes are on China as copper spreads on the LMEcollapse, writes Reuters columnist Andy Home. CHINA COAL: Chinese coal prices continued to plummet asChinese mines ramp up production. Cheaper coal should reduceenergy costs for metal smelters. ALUMINIUM: Electricity costs are most important foraluminium, the production of which uses huge amounts of power.Shanghai aluminium prices fell sharply. On the LME,aluminium was up 1.7% at $2,619 a tonne but still nearly20% down from its peak last month.
CHINA OUTPUT: In October, China's copper output fell 0.3%year-on-year, zinc output fell 9.2% and alumina production fellto a 10-month low, official data shows. METALS PRICES: LME zinc fell 0.9% to $3,194.50 atonne, nickel slipped 0.2% to $19,360, lead lost1.9% to $2,263, while tin was up 1.1% at $38,045.
(Reporting by Peter HobsonAdditional reporting by Mai Nguyen in Hanoi'; Editing by KirstenDonovan/Krishna Chandra Eluri/Pravin Char)