LONDON: Copper prices sank on Monday as the market fretted about surpluses of the industrial metal, rising stocks, poor demand prospects in top consumer China and a firmer dollar.
Benchmark copper on the London Metal Exchange (LME) were down 0.4% at $8,538 a tonne at 1039 GMT.
Data from the International Copper Study Group showed the market in the January-May period saw a surplus of 287,000 tonnes.
“Buying enthusiasm for copper has been muted by the fact that there is quite a bit of copper on the market right now,” said Edward Meir, an analyst who provides research for brokerage firm Marex.
“We expect a lower dollar and falling U.S. rates…to help the upside as could rising mining costs and ongoing labour issues. However, we are still not seeing much demand coming out of China or the rest of the manufacturing world for that matter.”
Copper heads for a flat week, focus on US data, China demand
The Yangshan copper premium, which indicates demand for Chinese copper imports, fell last week to $29 a tonne, the lowest since May 18. It was last at $31.50, a 40% slide over the last month.
Copper supplies are expected to improve in August as many smelters resume production after summer maintenance, and also due to increased profits amid high copper concentrate processing treatment and refining charges.
Copper inventories in LME approved warehouses at 79,325 tonnes are up nearly 50% since July 12.
On the technical front, the upside barrier for copper is around $8,455 where the 21-, 100- and 200-day moving averages are converging.
Clues to the direction of the dollar are expected on Thursday with inflation data, which could influence the U.S. Federal Reserve’s monetary policy decisions.
However, on Monday the higher U.S. currency, which makes dollar-denominated commodities more expensive for holders of other currencies, weighed on industrial metals overall.
Aluminium was down 0.2% at $2,228 a tonne, zinc retreated 0.4% to $2,494, lead rose 1% to $2,148, tin was little changed at $27,710 and nickel climbed 1.1% too $21,555.
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