Copper prices in London fell 0.3% due to a stronger dollar, countering China’s stockpiling plans for industrial metals. The lack of specific details regarding China’s acquisitions has contributed to the market’s reaction. Economic conditions and U.S. domestic production efforts were also discussed, impacting prices across various metals.
On Friday, copper prices in London faced downward pressure due to a stronger dollar, overshadowing reports of China’s plans to bolster its strategic reserves of essential industrial metals. This acquisition effort from China involves commodities such as copper, cobalt, nickel, and lithium, as reported by Bloomberg News. However, specific details regarding the volume or timing of the purchases remain undisclosed.
At 0339 GMT, the benchmark three-month copper price on the London Metals Exchange (LME) decreased by 0.3%, settling at $9,911 per metric ton. A trader noted that the news of strategic buying had little immediate effect on metal prices due to the absence of detailed information. Concurrently, the dollar strengthened following indications from the U.S. Federal Reserve that there was no urgent plan to lower interest rates, which also affects commodity pricing.
The dollar index increased by 0.2% to 103.96, building on a 0.36% rise from the previous day. As a stronger U.S. dollar makes dollar-denominated metals more expensive for international buyers, this contributed additionally to the decline in copper prices. Moreover, U.S. President Donald Trump invoked emergency powers to enhance domestic production of key minerals like lithium and nickel to reduce reliance on China and address projected demand for electric vehicle batteries.
Moreover, aluminum prices on the LME fell by 0.4% to $2,649.5 per ton, while lead decreased by 0.7% to $2,042. Zinc experienced a slight drop of 0.3%, settling at $2,911, and tin fell by 0.7% to $35,100. As for nickel, it declined by 0.6% to $16,180. In the Shanghai Futures Exchange (SHFE), copper also witnessed a decline of 0.3% to 81,110 yuan per ton, while aluminum fell by 0.3% to 20,775 yuan. Zinc increased marginally by 0.1% to 23,775 yuan, and lead dropped 1.3% to 17,435 yuan, while nickel decreased by 0.7% to 129,370 yuan. Conversely, tin saw a minor uptick of 0.6% to 280,710 yuan.
The current economic context, characterized by a stronger dollar and strategic buying from China, highlights the volatility within the metals market, particularly for copper and other industrial metals, amidst ongoing efforts to enhance domestic mineral production in the U.S.
In conclusion, copper prices have declined due to a robust dollar, which overshadowed China’s strategic reserve acquisition plans for industrial metals. Despite the potential impact of these plans, the lack of detailed information has led to negligible immediate effects on pricing. The interplay between currency strength and commodity prices continues to create fluctuations in the metals market, demonstrating the complexities of global trade and domestic production initiatives.
Original Source: www.tradingview.com
