SHANGHAI: Shanghai copper slipped on Wednesday, retreating from gains seen in the previous session, as trader optimism lost steam due to weak Chinese demand from high prices and a stronger dollar.
The most active copper contract on Shanghai Futures Exchange was down 0.63% at 84,990 yuan ($11,931.77) per metric ton, as of 0302 GMT.
This snaps two consecutive sessions of gains, which were supported by China’s strong industrial production and fresh attempts to ease Sino-US trade tensions.
The benchmark three-month copper future dipped 0.15% to $10,608 a ton.
There’s low acceptance for high prices among downstream buyers, muting demand for the red metal.
“It’s actually a good thing that copper price was corrected a little bit, as it could stir some real consumption from the downstream buyers.
They are not buying at all previously,“ a Shanghai-based copper trader said, requesting anonymity as the person is not authorized to speak to the media. Copper was also impacted by a stronger US dollar in recent days, despite a slight retreat on Wednesday.
A strong dollar weakens greenback-priced commodities by making it more expensive for buyers using other currencies.
Traders were also watching the China-US trade conflict closely in the run-up to a planned meeting between US President Donald Trump and his Chinese counterpart Xi Jinping next week in South Korea.
Meanwhile, supply shortage due to mine disruptions continue to set a floor for copper prices, leaving any decline limited.
Elsewhere among SHFE base metals, aluminium and tin added 0.26%, nickel posted sole loss at 0.30%, while zinc and lead were little changed.
Among other LME metals, zinc and lead gained 0.23%, while aluminium, nickel and tin were little changed.