LONDON: Prices for copper and aluminium fell in London on Friday as data showing a tumble in euro zone business activity weakened the euro, and the dollar strengthened weighing on prices for industrial metals.
Three-month copper on the London Metal Exchange (LME) was down 0.7% at $8,950 per metric ton in official open-outcry trading. The Eurozone’s dominant services industry contracted and manufacturing sank deeper into recession this month, a survey showed on Friday. The euro plunged to a two-year low after the data, and the US dollar index hit a fresh two-year high.
Eight weeks of the US currency strengthening, which makes dollar-priced metals more expensive for buyers using other currencies, and concerns about demand in top metals consumer China helped copper to fall by 12% from a four-month peak hit on Sept. 30.
“Industrial metals have also struggled amid heightened tensions and tariff threat, lowering the near-term outlook for growth and demand while gold and other investment metals have received a haven bid,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold rose 1% on Friday with signs of escalation in the Russia-Ukraine war after Russia’s strike on Ukraine using a newly developed hypersonic ballistic missile.
A poll, the first on China’s economy by Reuters since Donald Trump’s sweeping election victory on Nov. 5, showed this week that the United States could impose nearly 40% tariffs on imports from China early next year.
Meanwhile, the recent decline in copper prices helped to revive some part of demand in China - visible in a five-week-long decline in copper inventories in warehouses monitored by the Shanghai Futures Exchange.
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