Copper prices in London declined due to a stronger dollar, despite reports of China planning to expand strategic reserves of metals. Prices for various metals fell, reflecting the impact of currency fluctuations and U.S. government actions aimed at increasing domestic mineral production.
On Friday, copper prices in London declined as a strengthening dollar outweighed positive sentiment from reports regarding China’s plans to increase its strategic reserves of essential industrial metals. According to Bloomberg News, the National Food and Strategic Reserves Administration, responsible for managing commodity stockpiles, engaged in price inquiries and bidding for metals such as cobalt, copper, nickel, and lithium, though specific volumes or timelines were not disclosed.
As of 0707 GMT, the benchmark three-month copper price on the London Metals Exchange (LME) fell by 0.9% to $9,853 per metric ton. A trader noted, “The strategic buying news does not have much impact on metals prices today, due to lack of details.”
The dollar strengthened as the U.S. Federal Reserve signaled no immediate plans to reduce interest rates. The dollar index rose 0.3% to 104.06, following a 0.36% increase on Thursday. The strengthening U.S. currency renders dollar-priced metals more expensive for international buyers.
In related developments, U.S. President Donald Trump invoked emergency powers to boost domestic production of critical minerals, including lithium and nickel. This initiative aims to diminish China’s dominance in the sector and prepare for the growing demand associated with electric vehicle batteries.
Other metals on the LME also saw declines, with aluminium falling 0.7% to $2,641.5 per ton, lead down 0.8% to $2,040, zinc decreasing by 0.4% to $2,907, tin dropping 2.1% to $34,610, and nickel lowering 0.8% to $16,150. On the Shanghai Futures Exchange (SHFE), copper slipped 0.9% to 80,610 yuan ($11,252.64) per ton, with similar declines observed for aluminium, lead, nickels, and tin.
The exchange rates noted indicate that $1 equals 7.2463 Chinese yuan renminbi.
In summary, copper prices fell due to a stronger dollar, overshadowing reports of China’s strategic stockpiling of essential industrial metals. The dollar’s strengthening is attributed to the Federal Reserve’s stance on interest rates, negatively affecting metal prices for international buyers. Meanwhile, the U.S. government’s push to increase domestic production of critical minerals aims to counterbalance China’s market dominance. Overall, commodity prices demonstrate a downward trend amid these developments.
Original Source: www.tradingview.com
