Copper prices in London fell due to a stronger dollar, despite a report suggesting China’s plans to increase strategic reserves of key metals. The U.S. dollar’s strength negatively affected metal prices for international buyers. Other metals also declined in the market.
On Friday, copper prices in London saw a decline as the stronger U.S. dollar overshadowed positive market sentiments following reports of China’s intention to expand its strategic reserves of vital industrial metals. The National Food and Strategic Reserves Administration initiated inquiries regarding the pricing and bidding of metals, which include cobalt, copper, nickel, and lithium, though specific details regarding volumes or timing were not disclosed.
The three-month copper benchmark on the London Metals Exchange (LME) fell by 0.9% to $9,853 per metric ton, as reported at 0707 GMT. A trader noted that the news about strategic buying did not significantly influence metals prices due to the absence of particulars.
The dollar strengthened following the U.S. Federal Reserve’s indications that there would not be an immediate reduction in interest rates, leading to an increase in the dollar index by 0.3% to 104.06 after a 0.36% rise the previous day. A robust U.S. dollar makes dollar-denominated metals pricier for buyers with alternative currencies.
In related developments, U.S. President Donald Trump invoked emergency powers to enhance domestic production of essential minerals, including lithium and nickel, to mitigate China’s dominance in this sector while preparing to meet the projected demand for electric vehicle batteries.
In addition to copper, other metals on the LME experienced declines with aluminium down 0.7% to $2,641.5 per ton, lead fell 0.8% to $2,040, zinc decreased by 0.4% to $2,907, tin dropped by 2.1% to $34,610, and nickel fell by 0.8% to $16,150. Additionally, copper on the Shanghai Futures Exchange (SHFE) decreased by 0.9% to 80,610 yuan ($11,252.64) per ton, while aluminium, zinc, lead, and nickel also reported drops.
In summary, copper prices faced a decline amidst a stronger U.S. dollar, which diminished the impact of China’s strategic metal stockpiling plans. Despite efforts to bolster prices through domestic production initiatives by the U.S. administration, commodity prices showed a general trend of weakening across various metals.
Original Source: www.tradingview.com
