Copper breaks four-session win streak

LONDON: Copper slipped on Wednesday, breaking four sessions of gains, weighed down by a stronger dollar, rising inventories and concern about demand in China, the top metals consumer.

The benchmark three-month contract on the London Metal Exchange was down 0.9percent at USD9,750 a metric ton by 1430 GMT, having hit a two-week peak of USD9,862 on Tuesday.

LME copper has climbed 11percent this year, rebounding from more than a 16-month low of USD8,105 in early April. “Chinese demand is showing signs of slowing, with headwinds for the economy including tariffs and the ailing property sector,” said Ewa Manthey, a commodities strategist at ING.

Data from China was mixed, showing industrial profits declined for a third straight month in July against a backdrop of weak demand and ongoing factory gate deflation.

The decline, however, was less than the drops in May and June, and manufacturing sector profits climbed by 6.8 percent. The improvement could be the result of a campaign the Chinese government has been waging over the past two months to reduce excess capacity in industry, including metals, said Alastair Munro, senior base metals strategist at Marex.

“Metals are holding up pretty well given the softer macroeconomic environment and the dollar rally,” Munro said. Metals prices were also pressured by a firmer dollar after US President Donald Trump’s move to fire Federal Reserve Governor Lisa Cook, which renewed investor concern over the central bank’s independence.

A stronger US currency makes dollar-priced metals more expensive for buyers using other currencies.

Rising inventories in warehouses registered by the LME and US COMEX exchange also undermined sentiment. LME copper inventories, which added another 1,100 tons in data released on Wednesday, have surged by 72 percent since late June to 156,100 tons.

COMEX stocks have nearly tripled so far this year. Among other metals, LME aluminium dropped 1.3 percent to USD2,603.50 a ton, nickel lost 1.1 percent to USD15,115 and zinc shed 1.7 percent to USD2,766 after hitting a three-week low. Lead was flat at USD1,988 a ton and tin climbed 0.7 percent to USD34,430, the strongest in about a month.