LONDON: Copper steadied on Monday, having hit its lowest level since mid-April after moves by China to rein in commodities price rallies and signals from the US Federal Reserve it will tighten monetary policy sooner than expected.
Benchmark copper on the London Metal Exchange (LME) was up 0.6% at $9,203 a tonne at 1611 GMT after falling to $9,011 earlier in the day.
The metal used in power and construction hit a record high of $10,474.50 in May. Prices fell 8.6% last week.
“We’ve seen the top, and the trend is to the downside,” said Commerzbank analyst Daniel Briesemann, predicting that prices would average $8,000-$8,500 in the third quarter of the year.
The Fed’s change in tone last week hit riskier assets and boosted the dollar, making metals costlier for buyers using other currencies. Global stocks steadied on Monday and the dollar weakened. The yuan, currency of the biggest metals consuming country, fell, however.
Iron ore futures in Asia tumbled after Chinese authorities launched an investigation into spot trading.
Copper surged almost 150% between March 2020 and May 2021 as speculators bet demand in infrastructure and electrification would overwhelm supply.
Speculators cut their net long position in LME copper to 10% of active contracts by Thursday, brokers Marex Spectron said. The net long in Comex futures has more than halved this year to its lowest since June 2020.
Global primary aluminium output rose to 5.744 million tonnes in May, data from the International Aluminium Institute (IAI) showed. China’s production of copper, alumina, lead and zinc rose in May, official data showed.
LME aluminium was up 0.9% at $2,407 a tonne, zinc was 0.7% higher at $2,843.50, nickel rose 1.9% to $17,485, lead gained 0.3% to $2,153.50 and tin was up 1% at $30,150.
Comments
Comments are closed for this article.