Copper prices in London fell on Friday as a stronger dollar overshadowed positive news regarding China’s expansion of strategic reserves in industrial metals. The U.S. dollar firmed due to Federal Reserve policies, making dollar-priced metals costlier for international buyers, while other metals also saw varying price declines.
On Friday, copper prices in London experienced a decline as the strengthening U.S. dollar mitigated the positive impact of a report regarding China’s plans to bolster its strategic reserves of key industrial metals. According to Bloomberg News, the National Food and Strategic Reserves Administration is exploring the procurement of various metals, including cobalt, copper, nickel, and lithium; however, specific details on the volumes or timelines remain unspecified.
At the London Metals Exchange (LME), benchmark three-month copper prices fell by 0.9%, settling at $9,853 per metric ton by 0707 GMT. A trader remarked that the news of strategic buying did not significantly influence metal prices due to the absence of concrete details.
The dollar’s value increased, attributed to the U.S. Federal Reserve’s assurance of no immediate interest rate reductions. The dollar index rose by 0.3% to 104.06, following a 0.36% increase the previous day. A stronger dollar renders dollar-denominated metals more costly for international buyers.
In a related development, U.S. President Donald Trump invoked emergency powers to enhance domestic production of essential minerals, such as lithium and nickel, aiming to reduce China’s dominance in the sector and meet the growing demands of electric vehicle batteries.
Furthermore, other metals saw varying degrees of decline; LME aluminium fell 0.7% to $2,641.5 per ton, lead decreased by 0.8% to $2,040, zinc declined by 0.4% to $2,907, and tin experienced a 2.1% drop to $34,610. Nickel also dropped by 0.8% to $16,150.
On the Shanghai Futures Exchange (SHFE), copper fell 0.9% to 80,610 yuan ($11,252.64) per ton while aluminium decreased by 0.7% to 20,700 yuan. Zinc remained stable at 23,770 yuan, lead dropped 1.4% to 17,430 yuan, nickel lost 0.9% to 129,190 yuan, and tin slid 1.0% to 276,150 yuan.
In summary, copper prices in London have declined due to a stronger U.S. dollar, outweighing optimism stemming from China’s strategic reserve expansion plans. The dollar’s strengthening, bolstered by Federal Reserve policies, has contributed to increased prices of metals for buyers using other currencies. Additionally, the U.S. government’s moves to bolster domestic production of critical minerals aim to counter potential supply chain issues arising from reliance on Chinese dominance.
Original Source: www.tradingview.com
