BEIJING: Copper prices slid on Wednesday, weighed down by a firm U.S. dollar and soft demand in top consumer China, while low inventories lent some support to the metal.
Three-month copper on the London Metal Exchange (LME) was down 0.2% at $8,526 per metric ton by 0410 GMT, while the most-traded February copper contract on the Shanghai Futures Exchange (SHFE) slid 0.3% to 68,600 yuan ($9,598.16) per ton.
The dollar index on Tuesday recorded its biggest daily increase since October, supported by higher U.S. bond yields, while investors waited for U.S. jobs data and European inflation numbers for clues on central banks’ policies.
Investors bet that the U.S. report will show a robust job market in the world’s top economy, adding to the argument against the need for rate cuts as early as March.
Recent buying slowed down in China, the world’s top metal consumer, due to seasonally weak demand and strong domestic production in December.
Copper under pressure from climbing dollar
Yangshan copper premium, an indicator of import demand, fell to $67.50 per ton, down by 67% from about a month earlier.
The market was underpinned by thin inventories. In China, the world’s top metal consumer, copper inventories in major consuming regions stood at 71,600 tons after the new year holiday, a near 14-year low, according to Shanghai Metals Market (SMM).
LME aluminium slipped 0.5% at $2,323 a ton, zinc shed 0.6% to $2,604.50, nickel gained 0.2% to $16,600, tin was stable at $25,190, and lead was little moved at $2,064.
SHFE aluminium fell 1% to 19,375 yuan a ton, lead gained 0.1% to 15,970 yuan, nickel rose 0.8% to 128,010 yuan, tin added 0.2% at 210,000 yuan, and zinc was up 0.4% to 21,565 yuan.
Comments