LONDON: Copper prices dipped below the key mark of $10,000 a metric ton on Tuesday for the first time in three weeks as consolidation continued due to lacklustre demand in top consumer China.
Three-month copper on the London Metal Exchange extended losses to drop 2% to $9,945 a ton at 1447 GMT. It earlier dipped to $9,924.8, the lowest since May 8.
Soft US economic data has boosted the case for earlier rate cuts by the Federal Reserve, helping the dollar to rebound from its lowest since mid-March.
A stronger dollar makes greenback-priced metals costlier for holders of other currencies. Copper prices, widely used in cables and infrastructure for its conductivity, have rallied to all-time highs across exchanges in London, Chicago, and Shanghai in the last two months.
Copper trading volumes in May reached a historic high, while long positions in copper contracts remained close to record levels. But its rally has muted physical demand.
LME copper inventories climbed to a six-week high of 118,950 tonnes with delivery to registered warehouses in Taiwan. Shanghai’s inventory also remained at close to 300,000 tonnes since March. Chinese copper inventories have not yet started their seasonal decline, suggesting that the copper market is much more sufficiently supplied than some traders had thought.
Looking ahead, China’s industrial data due in mid-June will shed more light on metals demand later this year, Menke said. For other metals, LME zinc touched a three-week low of $2,905. The galvanising metal last traded 0.7% lower at $2,923.5.
LME aluminium was flat at $2,661.5 a ton, nickel edged down 0.9% to $19,245, tin was down 1% at $32,005 while lead was 1.4% lower at $2,256.
Comments
Comments are closed for this article.