LONDON: Copper prices drifted lower on Thursday as the dollar held firm while market attention turned to US-China talks this weekend. Benchmark copper on the London Metal Exchange (LME) lost 0.3% to $9,390 a metric ton in official open-outcry trading.
The US dollar index ticked up. A stronger US currency makes dollar-priced commodities more expensive for buyers with other currencies. Copper is under slight pressure from traders locking in short-term profits as well as the marginal turnaround in the US dollar, said said SP Angel analyst John Meyer, adding that he believes that “the market is not taking big positions in this environment”.
US Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China’s economic tsar He Lifeng in Switzerland this weekend.
Adding to positive trade sentiment was news that the US and Britain are expected to announce a deal to reduce tariffs on certain goods. “Specific to copper, the dichotomy remains the strength in Chinese copper demand in the here and now versus the street’s bearish macro outlook,” said Alastair Munro, senior base metals strategist at broker Marex.
The Yangshan copper premium, a gauge of Chinese import demand, is at $100 a ton, its highest since December 2023. Copper stocks in Shanghai Futures Exchange-monitored warehouses have recently registered massive drops while inventories in COMEX-owned warehouses were at their highest since late 2018.
“Amid US tariff expectations, all the metal is being drawn to CME, creating a tight supply situation in other parts of the world,” Munro said, adding that the Chinese situation is exacerbated by a shortage of scrap metal. Goldman Sachs raised its quarterly copper price forecast, citing de-escalation in trade tensions and resilient Chinese copper demand.
LME aluminium added 0.2% to $2,388 a ton. Two people with knowledge of the matter told Reuters on Wednesday that Guinea has initiated a process to revoke Emirates Global Aluminium’s mining licence in the West African nation.
LME zinc eased 0.8% to $2,596 a ton, lead dipped 1.3% to $1,933, tin gained 1% to $31,965 and nickel was little changed at $15,555.
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