On Friday, copper prices declined due to a stronger U.S. dollar overshadowing China’s intentions to expand reserves of key metals. Reports indicated inquiries made by China’s National Food and Strategic Reserves Administration regarding various metals; however, lack of specifics limited market impact. Concurrently, other metals also experienced price declines amid these developments.
On Friday, copper prices in London experienced a decline due to the strengthening of the U.S. dollar, which overshadowed a news report suggesting that China intends to enhance its strategic reserves of essential industrial metals. The National Food and Strategic Reserves Administration has reportedly made inquiries and initiated bidding for these metals, including cobalt, copper, nickel, and lithium, although no specifics regarding volumes or timelines were disclosed.
Benchmark three-month copper traded on the London Metals Exchange (LME) fell by 0.3% to $9,911 per metric ton as of 0339 GMT. A trader noted that the reported strategic buying news had minimal impact on metal prices because it lacked detailed information. The dollar’s strengthening was also attributed to signals from the U.S. Federal Reserve indicating no immediate plans for interest rate reductions.
As the dollar index increased by 0.2% to 103.96, following a 0.36% rise the previous day, dollar-priced metals became more expensive for purchasers using other currencies. Additionally, U.S. President Donald Trump invoked emergency powers to bolster domestic production of vital minerals like lithium and nickel, aiming to diminish China’s dominance in the sector and address the expected demand for electric vehicle batteries.
Alongside copper, other metals also showed declines; LME aluminium dropped 0.4% to $2,649.5 per ton, lead decreased by 0.7% to $2,042, zinc fell 0.3% to $2,911, and tin decreased by 0.7% to $35,100. Nickel fell by 0.6% to $16,180. In the Shanghai Futures Exchange (SHFE), copper declined by 0.3% to 81,110 yuan ($11,252.64) per ton. Other metals saw varied reactions: SHFE aluminium fell by 0.3% to 20,775 yuan, whereas zinc increased by 0.1% to 23,775 yuan, lead dropped 1.3% to 17,435 yuan, and nickel lost 0.7% to 129,370 yuan. Tin saw a modest rise of 0.6% to 280,710 yuan.
In summary, copper prices faced downward pressure owing to a stronger U.S. dollar and insufficient details surrounding China’s plans to stockpile key industrial metals. Despite the report regarding Chinese purchasing intentions and U.S. domestic production efforts, market reactions appeared subdued, with copper and related metals collectively experiencing declines. The ongoing strength of the dollar further complicates the pricing landscape for these commodities.
Original Source: www.tradingview.com
