LONDON: Copper prices fell to their lowest in six weeks on Tuesday, pressured by weak Chinese demand, a stronger dollar and a sharp rise in inventories in the London Metal Exchange (LME) warehouse system. Benchmark LME copper was down 2.4% at $8,524.50 a tonne at 1646 GMT, heading for a fifth consecutive daily loss. The metal used in electrical wiring has fallen from a seven-month high of $9,550.50 in January.
Behind the price weakness is a weaker than hoped rebound in demand from top consumer China and a gloomy economic outlook elsewhere. Chinese stock markets fell for a fifth day after last week’s first-quarter GDP numbers revealed an uneven rebound and lagging factory and property activity.
Caution among investors pushed stock markets down globally and boosted the dollar, hitting metals by making them costlier for buyers holding other currencies.
Visible Chinese copper inventories are drawing down, but Yangshan import premiums have slumped to $23 a tonne from $50 in March, pointing to weak demand.
On-warrant copper stocks in LME-registered warehouses, meanwhile, rose by 7,000 tonnes to 57,025 tonnes, their highest since mid-January. Copper demand should improve as the year goes on, lifting prices, said WisdomTree analyst Nitesh Shah. “There is more reason to be optimistic than pessimistic,” he said.
LME aluminium fell 2% to $2,333 a tonne and was down from a seven-month high of $2,679.50 in January.
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