LONDON: Copper prices fell on Wednesday as an economic and demand slowdown in China pressured the market ahead of a long public holiday in the top consumer.
Three-month copper on the London Metal Exchange (LME) fell after a short-lived rebound in the previous session. The red metal prices have registered a 2.9% loss so far this year. It was last trading at $8,376.5 per metric ton as at 1210 GMT.
“Copper has been range-bound lately with the market weighed by slowdown of Chinese economy and a potential for improved demand from green energy sector,” Ewa Manthey, commodities strategist at ING told Reuters.
Demand concerns weighed on near-term prices to create record discounts for the cash contract over three-month contract. The discount, or contango, on the LME reached $108.75 a metric ton on Wednesday. It set a fresh record high of $112.26 on Feb. 5.
Copper prices are unlikely to move higher until more signals of sustainable recovery are seen in China, Manthey added.
Copper extends fall under pressure from stronger dollar
But clarity may not come until China’s January-February economic data is published in March.
For other metals, zinc prices dipped to a 9-week low of $2,396.5 a ton after stock data came in to show fresh arrival of 9,900 tonnes at LME’s registered warehouse in Singapore. It last traded at $2,406.5 a ton.
A recent Reuters poll of analysts expected a 2024 surplus of 300,000 tonnes in the galvanizing metal, mainly used in protecting steel from corrosion.
A softer U.S. dollar, however, provide some support to greenback-priced metals to make them more attractive for holders of other currencies.
LME aluminium edged 0.3% lower at $2,224 a ton, lead dropped 0.5% to $2,105, tin increased 0.4% to $25,295, while nickel fell 0.1% to $15,910.
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