LONDON: Copper prices dropped to their lowest in over a month on Wednesday on worries about China’s economy after disappointing data and as investors came to terms with delayed interest rate cuts by the U.S. Federal Reserve.
Three-month copper on the London Metal Exchange (LME) had lost 0.7% to $8,300 per metric ton by 1040 GMT after touching $8,258, the weakest since Dec. 7.
Top metals consumer China slightly missed forecasts for economic growth, but more worrying were ominous numbers about the property sector, such as property sales measured by floor area plunging 23% in December.
“There are still a lot of difficulties on the property side of things and it doesn’t really seem like the real estate sector has made any significant turnaround since the start of stimulus,” said Nitesh Shah, commodity strategist at WisdomTree.
“There’s a question mark on whether China is really doing all it can to get its economy on track.”
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Other December indicators in China showed retail sales grew at the slowest pace since September and investment growth remained tepid, though industrial output showed signs of improvement.
On the Shanghai Futures Exchange, the most-traded March copper contract dipped 0.1% to 67,720 yuan ($9,410.91) per ton.
Production of 10 nonferrous metals in China, including copper, aluminium, lead, zinc and nickel, rose 7.1% to 74.7 million tons in 2023, a record high.
A steady dollar also weighed on the market, as a stronger dollar makes greenback-priced commodities more expensive for buyers using other currencies.
The dollar index hit a one-month high as remarks by the U.S. Fed Governor Christopher Waller dampened expectations for a March rate cut.
Most other metals on the LME also fell. Aluminium eased 1.2% to $2,188 a ton, zinc shed 1.9% to $2,499, nickel slipped 0.3% to $16,095, lead slid 1.9% to $2,065 while tin edged up 0.1% to $25,210.
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