LONDON: Copper prices dropped below $9,000 a metric ton on Thursday, weighed down by a stronger dollar, concern over global growth and demand in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) lost 0.5% to $8,973 a ton in official open-outcry trading. The US currency index edged higher — reflecting strength that makes dollar-priced metals less attractive for buyers with other currencies — in thin trading because of the US Thanksgiving holiday.
Investors are still awaiting further developments after US President-elect Donald Trump’s pledges to impose a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China when he takes office in January. “US dollar strength, from the Trump effect, is holding everything back,” said SP Angel analyst John Meyer.
In a comment reminiscent of the trade war during Trump’s first term, China criticised Trump’s tariff vow on Thursday, saying that the imposition of “arbitrary tariffs on trading partners will not solve America’s own problems”.
China’s imports of scrap copper are set to slump, with some traders having already suspended buying from the United States, analysts said. Investors are focused on China’s manufacturing purchasing managers’ index (PMI) data due this week and the Chinese Politburo meeting in early December for further clarity on the outlook for China’s economy. In other metals, LME zinc shed 2.8% to $3,044 a ton in official activity, retracing from its four-week high of $3,168 as LME data showed an increase to available stocks in LME-registered warehouses after the previous day’s slump.
“The scale of (zinc stocks) moves is not determined by any shift in demand or supply,” said Alastair Munro at broker Marex, adding that the moves would be associated with warehouse rent factors. Aluminium dropped 0.5% to $2,581.5 a ton while tin was down 1.7% at $27,475, after hitting a fresh eight-month low of $27,200, under pressure from investment funds reducing net long speculative positions.
Lead rose 0.2% to $2,060 a ton and nickel was up 0.9% at $16,030. Both metals are supported by covering of short positions, Marex said.
Source: Brecorder
