Copper Prices Decline Amid Stronger Dollar and China Stockpiling Plans
Copper prices have dipped as a stronger U.S. dollar outpaces the positive indicators from China’s anticipated stockpiling of industrial metals. Concerns regarding the lack of detail in stockpiling plans and recent U.S. policy shifts further impacted metal prices across various exchanges.
On Friday, copper prices in London experienced a decline as the strength of the dollar overshadowed optimistic sentiments arising from reports about China’s plans to augment its stockpiles of essential industrial metals. According to a report by Bloomberg News, the National Food and Strategic Reserves Administration has initiated price inquiries and bidding for metals such as cobalt, copper, nickel, and lithium, although specific details regarding volumes or timelines were not provided.
As of 0707 GMT, the benchmark three-month copper on the London Metals Exchange (LME) saw a decrease of 0.9%, trading at $9,853 per metric ton. A trader noted that the influence of news regarding strategic buying was minimal on metals prices due to the lack of concrete details accompanying the report.
The dollar strengthened, driven by the U.S. Federal Reserve’s recent statement indicating that there would be no immediate plans to reduce interest rates. The dollar index rose by 0.3% to 104.06, following a 0.36% increase on Thursday, thus making dollar-priced metals more costly for purchasers using other currencies.
Additionally, actions by U.S. President Donald Trump to invoke emergency powers aimed at enhancing domestic production of critical minerals, such as lithium and nickel, have been taken to mitigate China’s dominance in this sector while also addressing expected demand for electric vehicle batteries.
Other metals on the London Metals Exchange also witnessed declines, with aluminium falling 0.7% to $2,641.5 per ton, lead down 0.8% to $2,040, zinc decreasing by 0.4% to $2,907, tin experiencing a drop of 2.1% to $34,610, and nickel down 0.8% to $16,150. Copper and aluminium prices on the Shanghai Futures Exchange (SHFE) followed suit, with copper down 0.9% to 80,610 yuan ($11,252.64) a ton, while other metals showed similar trends in price decreases.
In summary, copper prices have declined in London due to a stronger U.S. dollar overshadowing positive news regarding China’s stockpiling plans. Despite positive sentiment surrounding China’s strategic purchases, a lack of details diminished their impact. U.S. policy changes also play a significant role in the evolving landscape of critical mineral production versus China’s market influence.
Original Source: www.tradingview.com
