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 US Federal Reserve.
Three-month copper on the London Metal Exchange (LME) was down 0.4% at $8,322.50 per metric ton in official open-outcry trading 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.” 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.
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 US Fed Governor Christopher Waller dampened expectations for a March rate cut.
Most other metals on the LME also fell. Aluminium eased 1.1% in official activity to $2,189 a ton, zinc shed 1.7% to $2,505, nickel slipped 0.9% to $16,000, lead slid 2.1% to $2,060 while tin edged up 0.2% to $25,225.
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