Copper prices continue to fall due to stronger dollar and demand concerns
The dollar strengthened on Tuesday and concerns about demand grew after the record high set last week.
As of 1700 GMT, the benchmark three-month copper price on London Metal Exchange had fallen 1.6% to $10,674 per kilogram. The price had fallen to $10,577.50 earlier, its lowest level since October 22, and was more than 5% below its peak of $11,200, which occurred on October 29,
Ole Hansen is the head of commodity strategy for Saxo Bank. He said that the pullback was a sign that the current fundamentals were not strong enough to support higher prices. The reversal also forced those who had been wrong-footed to give up.
Cash LME copper was trading at $29 per tonne less than the forward three-month contract
Dollar prices were also affected by its recent three-month high. The dollar is stronger, making metals denominated in dollars more expensive to holders of other currencies.
The yuan fell to its lowest level in two weeks, reducing the purchasing power of China, the world's largest copper consumer.
Hansen noted that the recent rise in copper prices was providing some support for around $10,550.
Copper's price rose last week on hopes of a US-China trade agreement, as well as concerns about mine supply. However, the meeting between the presidents of both countries did not result in a final agreement.
Chile's Codelco - the world's biggest copper producer - cut its output forecast for 2025 on Tuesday despite an increase in production during the first nine month.
The LME complex saw a decline across the board. The LME complex was down across the board. Aluminium dropped 1.5% to 2,859.50. Nickel fell 0.3% to $16,090. Lead lost 0.2% at $2,022. Zinc dipped by 0.4% to $ 3,087. Tin was down 1% to $35,675. (Reporting and editing by Sahal Muhammad, Kirsty Donovan, Alexander Smith and Lewis Jackson. Additional reporting by Dylan Duan).
(source: Reuters)