Copper Prices Decline Amid Strong Dollar and China’s Stockpiling Plans

On Friday, copper prices fell due to a stronger dollar, despite news of China’s plans to increase its strategic reserves of industrial metals. The absence of specific details regarding China’s purchases dampened market reactions. Prices of other metals also declined amid uncertainties in the global market.

On Friday, copper prices in London experienced a decline due to a stronger U.S. dollar, which overshadowed the positive news regarding China’s plans to bolster its strategic reserves of important industrial metals. As indicated by Bloomberg News, the National Food and Strategic Reserves Administration is making inquiries and bids for various metals, yet no specifics regarding quantities or timing have been disclosed.

The metals that are reportedly under consideration for purchase include cobalt, copper, nickel, and lithium. As of 0339 GMT, benchmark three-month copper was quoted at $9,911 per metric ton on the London Metals Exchange, reflecting a decrease of 0.3%. A trader remarked, “The strategic buying news doesn’t have much impact on metals prices today, due to lack of details.”

The strengthening dollar index, which increased by 0.2% to 103.96, has contributed to the downturn in copper prices, as a stronger dollar renders dollar-priced metals more expensive for buyers utilizing alternative currencies. This situation comes in the wake of statements from the U.S. Federal Reserve indicating no immediate plans to reduce interest rates.

In related market movements, U.S. President Donald Trump employed emergency powers to enhance domestic production of essential minerals—including lithium and nickel—to mitigate China’s dominance in the sector and address the anticipated demand for electric vehicle batteries. Additionally, other metals such as aluminium, lead, zinc, tin, and nickel also witnessed declines in their respective prices in both the London and Shanghai Futures Exchanges.

In summary, copper prices weakened on Friday due to the influence of a stronger dollar, effectively counteracting reports of China’s intentions to increase strategic metal reserves. While the potential purchasing plans were promising, they lacked sufficient detail to significantly sway market prices. The prevailing economic environment, including U.S. monetary policy and geopolitical actions concerning mineral production, continues to affect metal markets.

Original Source: www.tradingview.com