Copper prices dipped in London due to a stronger dollar, despite reports of China planning to increase its strategic reserves of industrial metals. The U.S. dollar firmed following the Federal Reserve’s stance on interest rates. Other metals also showed declines, while U.S. efforts to boost critical mineral production were announced to counter China’s dominance in the sector.
On Friday, copper prices in London experienced a decline due to a stronger dollar, overshadowing a report regarding China’s plans to enhance its strategic reserves of various industrial metals. Bloomberg News indicated that the National Food and Strategic Reserves Administration had made inquiries for purchasing metals but provided no specifics regarding volumes or timing. The metals under consideration include cobalt, copper, nickel, and lithium.
As of 0339 GMT, benchmark three-month copper on the London Metals Exchange (LME) showed a decrease of 0.3%, settling at $9,911 per metric ton. A trader remarked, “The strategic buying news does not have much impact on metals prices today, due to a lack of details.” This decline coincided with the dollar’s firming, reflecting the U.S. Federal Reserve’s stance on maintaining interest rates.
The dollar index rose by 0.2% to 103.96, following a 0.36% increase the previous day. A stronger U.S. dollar adversely affects the price of dollar-denominated metals for buyers using other currencies. In a related development, U.S. President Donald Trump invoked emergency powers to boost domestic production of essential minerals, including lithium and nickel, to reduce reliance on China and address the demand for electric vehicle batteries.
Other metals on the LME also saw declines; aluminium fell 0.4% to $2,649.5 per ton, lead decreased by 0.7% to $2,042, zinc lost 0.3% to $2,911, tin dropped 0.7% to $35,100, and nickel declined by 0.6% to $16,180. On the Shanghai Futures Exchange (SHFE), copper lost 0.3% to 81,110 yuan ($11,252.64) per ton, while aluminium fell 0.3% and zinc increased slightly by 0.1%. Lead dropped 1.3%, and nickel lost 0.7%, with tin showing a minor gain of 0.6%.
In summary, copper prices in London have declined, driven by a stronger dollar and overshadowed by a media report regarding China’s potential purchase of key industrial metals. The dollar’s strength, influenced by the U.S. Federal Reserve’s policy, has made dollar-priced metals costlier for international buyers. Simultaneously, domestic efforts in the U.S. to bolster mineral production have emerged as a response to anticipated demand in the electric vehicle sector. The overall performance of various metals has reflected a downward trend in the market.
Original Source: www.tradingview.com
