Copper prices in London dipped by 0.9% due to a stronger dollar, which mitigated the impact of news regarding China’s plans to expand its strategic reserves of key industrial metals. The U.S. Fed’s stance on interest rates bolstered the dollar, making dollar-priced metals more expensive for foreign buyers. Other metals on the LME and SHFE also experienced declines.
On Friday, copper prices in London experienced a decline as a robust U.S. dollar counteracted the optimism stemming from reports about China’s plans to increase its strategic reserves of essential industrial metals. The National Food and Strategic Reserves Administration signaled plans for stockpiling metals such as cobalt, copper, nickel, and lithium, though specifics regarding volumes and timing were not disclosed by Bloomberg News.
As of 0707 GMT, benchmark three-month copper on the London Metals Exchange (LME) decreased by 0.9%, settling at $9,853 per metric ton. A trader noted that the news of strategic buying had a limited impact on metal prices due to the absence of detailed information.
The dollar gained strength, supported by the U.S. Federal Reserve’s statements indicating no immediate plans to reduce interest rates. The dollar index rose by 0.3% to 104.06, following a 0.36% increase the previous day, which rendered dollar-denominated metals costlier for international buyers.
On Thursday, U.S. President Donald Trump invoked emergency powers to enhance domestic production of vital minerals, including lithium and nickel, addressing China’s dominance in the sector and preparing for the anticipated rise in demand for electric vehicle batteries.
Beyond copper, other metals experienced declines as well: LME aluminium fell 0.7% to $2,641.5 per ton, lead decreased by 0.8% to $2,040, zinc fell by 0.4% to $2,907, tin dropped 2.1% to $34,610, and nickel was down 0.8% to $16,150.
Meanwhile, on the Shanghai Futures Exchange (SHFE), copper lost 0.9% to 80,610 yuan ($11,252.64) per ton. Aluminium on SHFE also fell 0.7% to 20,700 yuan, zinc remained stable at 23,770 yuan, lead dropped 1.4% to 17,430 yuan, and nickel decreased by 0.9% to 129,190 yuan. Tin registered a slight decline of 1.0% to 276,150 yuan.
In summary, copper prices fell on Friday due to a stronger dollar overshadowing potential positive effects from China’s strategic reserve plans. The Federal Reserve’s stance on interest rates contributed to dollar strength, which resulted in higher costs for dollar-priced metals internationally. Furthermore, the U.S. government’s push to increase domestic mineral production underscores the ongoing competitive climate in the metals market, particularly in light of anticipated growth in electric vehicle battery demand.
Original Source: www.tradingview.com
