LONDON: Copper prices in London fell on Wednesday amid continuing concerns about global economic growth and a stronger dollar, although the fall was constrained by support from low inventories.
The benchmark London Metal Exchange (LME) contract for the metal used in electrical wiring was down 0.3% at $8,727.5 a tonne at 1054 GMT, after hitting $8,665, its lowest in two weeks.
“General downward sentiment and continued lack of momentum out of China is bringing metals down to their fundamental levels, erasing some of the risk-on sentiment that we saw take place last week,” said Daria Efanova, head of research at broker Sucden Financial.
Copper edges higher on weaker dollar, demand hopes
Weak US manufacturing activity, which slumped to the lowest level in nearly three-years in March, weighed on prices.
“Gauge of US manufacturing in March slumped to the lowest since 2020 suggesting tightening lending conditions are slowing economic activity while yesterday’s data showed the US jobs market is loosening,” ING analyst, Ewa Manthey said.
The dollar index rose, making metals costlier for buyers with other currencies, but it remained near its two-month low.
In China, the world’s biggest metals consumer, the Shanghai Futures Exchange is closed on Wednesday due to the Qingming holiday.
However, support for copper comes from stocks in LME registered warehouses, which at 65,250 tonnes have dropped almost 15% over the past two weeks.
Cancelled warrants – metal earmarked for delivery – at around 47% of the total suggest more metal is due to leave the LME system, leaving on warrant stocks at 34,350 tonnes, the lowest since late 2021.
LME aluminium fell 0.6% to $2,356.5 a tonne, zinc dipped 0.6% to $2,814.5, tin declined by 1.7% to $24,570, while nickel was down by 0.4% to $23,030. Lead gained 0.2% to $2,120.5.
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