LONDON: Copper prices rose in London on Friday, but were heading for their biggest weekly drop in five months due to concerns over sustained high interest rates, a firm dollar, and exchange inventories at their highest since May 2022.
Metals consumers, producers, traders and brokers will gather in London for LME Week next week, and markets in top metals consumer China will reopen after a week-long public holiday. Three-month copper on the London Metal Exchange was up 0.7% at $7,952.5 per metric ton by 1246 GMT.
It is heading for a 3.8% weekly decline, its worst weekly performance since May. Used in power and construction, copper has been hit in 2023 by weaker than expected demand growth in China and high global interest rates, a concern for construction activity outside of China. US job growth surged in September, data showed on Friday, suggesting that the labour market remains strong enough for the Federal Reserve to raise interest rates this year.
“The mood in the base metal markets has deteriorated again, with copper dropping back below $8,000 per tonne,” said Julius Baer analyst Carsten Menke.
“The fundamental backdrop has not changed that much,” he said. “We believe that the construction markets are remaining very resilient and that the backdrop in China has not changed.”
Recent actual demand for copper and aluminium in China is quite robust due to the home appliance, electric vehicle, solar and wind sectors and despite the country’s property sector crisis.
Source: Brecorder
