METALS-Copper falls to over 1-week low as strong dollar, higher bond yields weigh

May 20 (Reuters) - Copper declined to a more-than-one-week low on Wednesday, as a stronger dollar and a rise in U.S. Treasury yields weighed on the market. The benchmark three-month copper on the London Metal Exchange dipped 0.28% to $13,374 a metric ton as of 0315 GMT, after touching $13,350, the lowest since May 8.

The most-active copper contract on the Shanghai Futures Exchange lost 1.20% to 103,160 yuan ($15,142.53) a ton, after touching its lowest since May 8 at 103,040 yuan.

Concerns around the Iran war-fuelled inflation saw the dollar drifting higher, making greenback-priced metals more expensive for buyers using other currencies.

Long-dated U.S. Treasury yields also climbed, with the 30-year yield , long seen as a barometer of political risk, hitting its highest since 2007, adding pressure on risk-sensitive assets.

The benchmark 10-year Treasury note yield also surged to its highest since January 2025.

Higher yields reduce appetite for industrial metals, including copper, traders said, particularly after the red metal's recent rally left prices vulnerable to profit-taking.

Elsewhere, investors were also watching minutes from the Federal Reserve's latest meeting for clues on the U.S. rate outlook. Meanwhile, a nickel rally on Tuesday following fresh supply risks from Indonesia lost steam, despite a plan by Indonesia's government to centralise commodity exports through a state agency, with the export of coal and palm oil having to be done through the planned state agency, sources told Reuters. And several Indonesian cabinet ministers met with Chinese firms operating in the country, its energy minister said, after a China Chamber of Commerce in Indonesia wrote a letter to the president seeking more business-friendly policies, while warning tighter nickel ore quotas, higher taxes and a new pricing formula are driving up costs and threatening investment in the world's biggest nickel producer.

The London benchmark nickel dropped 0.43%, and the Shanghai most-active nickel contract, however, gained 0.49%.

Among other LME metals, aluminium dipped 0.15%, zinc dropped 0.23%, lead ticked 0.10% lower, and tin was little changed.

Elsewhere on SHFE, aluminium dipped 0.08%, zinc lost 0.53%, lead dropped 0.33% and tin tumbled 1.54%.

Wednesday, May 20

DATA/EVENTS (GMT)

0100 China Loan Prime Rate 1Y, 5Y May

0600 UK Core CPI YY Apr

0600 UK CPI YY Apr

0600 UK CPI Services MM, YY Apr

0900 EU HICP Final MM, YY Apr

($1 = 6.8126 Chinese yuan renminbi) (Reporting by Dylan Duan and Lewis Jackson; Editing by Harikrishnan Nair)