LONDON: Copper slipped on Wednesday, breaking four sessions of gains, weighed down by a stronger dollar, rising inventories and concern about demand in top metals consumer China.
The benchmark three-month contract on the London Metal Exchange was down 0.5% at $9,790.50 a metric ton by 0940 GMT, having hit a two-week peak of $9,862 on Tuesday.
LME copper has climbed by 11% this year, rebounding from a more than 16-month low of $8,105 in early April.
“Chinese demand is showing signs of slowing, with headwinds for the economy including tariffs and the ailing property sector,” said ING commodities strategist Ewa Manthey.
Data from China was mixed, showing industrial profits declined for a third straight month in July against a backdrop of weak demand and ongoing factory gate deflation.
The decline, however, was less than May and June, and manufacturing sector profits climbed by 6.8%.
The improvement could be the result of a campaign the Chinese government has been waging over the past two months to reduce excess capacity in industry, including metals, said Alastair Munro, senior base metals strategist at Marex.
Metals prices were also pressured by a firmer dollar after U.S. President Donald Trump’s move to fire Federal Reserve Governor Lisa Cook, which renewed investor concern over the central bank’s independence.
A stronger U.S. currency makes dollar-priced metals more expensive for buyers using other currencies.
Climbing inventories in warehouses registered by the LME and U.S. Comex exchange also undermined sentiment.
LME copper inventories, which added another 1,100 tons in data released on Wednesday, have surged by 72% since late June to 156,100 tons. Comex stocks have nearly tripled so far this year.
Among other metals, LME aluminium dropped 0.8% to $2,616.50 a ton, zinc shed 0.7% to $2,793.50 and nickel lost 0.6% to $15,200 while lead added 0.2% to $1,991.50 and tin was up 0.2% at $34,275.
Comments
Comments are closed for this article.