Industrial metals decline as traders weigh Fed rate outlook

Base metals retreated on Friday as traders weighed the likelihood of higher interest rates and their negative impact on demand.

A growing chorus of Federal Reserve officials are warning the central bank may soon need to lift rates, which would raise borrowing costs for manufacturers.

Although softer-than-expected US inflation figures this week have eased expectations of an immediate hike, the renewed hostilities across the Middle East are fanning price concerns, as well as threatening global economic growth and the outlook for industrial commodities.

Copper slipped 0.7% to $13 499 a ton on the London Metal Exchange as of 10:09 a.m. in Singapore. Aluminium dropped 0.4% while zinc fell 0.8%. Lead slipped 0.1%, on track for a 1.4% weekly drop after deliveries from Trafigura Group help lift LME stockpiles to a record.

Iron ore futures in Singapore were 0.1% higher.

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