LONDON: Copper fell sharply on Thursday, giving up some of the previous session’s gains as a firmer dollar, rising inventories and reduced demand because of the Lunar New Year holiday in China, the world’s biggest metals consumer, weighed on prices.
Benchmark three-month copper on the London Metal Exchange was down 1.4percent at USD12,725 a metric ton in official open outcry activity, after a 2.3percent jump on Wednesday.
Chinese traders are mostly away from the market as the Shanghai Futures Exchange is closed, reopening on February 24. “It’s really difficult to read too much into the price action this week,” said Ole Hansen, head of commodity strategy at Saxo Bank. “We need to get China back and see what happens then, both on the speculative and also on the physical demand in the following weeks.”
The dollar index firmed after minutes from the US Federal Reserve suggested policymakers were in no hurry to cut interest rates and that several were open to hikes if inflation proved sticky. A stronger dollar makes dollar-priced metals more expensive for holders of other currencies.
Copper stocks in LME-approved warehouses meanwhile increased by another 925 tons to 225,575 tons, the highest since March 2025. Offsetting the bearish impact of high stocks and the firmer dollar, copper was supported by technicals, Hansen said.
“Since last August, every time we have come down the 50-day moving average has been giving support,” he said. He added the support level was USD12,670, while on the upside the USD13,000 mark provided “psychological resistance”.
In other metals, zinc fell 0.9percent to USD3,323.50 a ton and aluminium shed 1.1percent to USD3,055, after breaking a four-day losing streak on Wednesday. Lead lost 0.4percent to USD1,956, nickel slid 0.8percent to USD17,140 and tin edged down 0.1percent to USD45,875.