Copper prices fell 0.3% amid dollar strength and vague China stockpiling news. The U.S. dollar gained due to the Fed’s rate stability. Other metals like aluminum, nickel, and lead also decreased. U.S. emergency measures aim to boost domestic critical mineral production.
On Friday, copper prices in London decreased due to a stronger U.S. dollar, overshadowing reports of China’s plan to expand its reserves of key industrial metals. According to Bloomberg News, China’s National Food and Strategic Reserves Administration is seeking to purchase metals like cobalt, copper, nickel, and lithium, but did not provide specifics on volumes or timing. Benchmark three-month copper on the London Metals Exchange (LME) fell by 0.3%, settling at $9,911 per metric ton as of 0339 GMT.
Traders noted that the news of strategic buying from China had limited influence on metal prices, primarily due to the absence of detailed information. At the same time, the U.S. dollar strengthened, supported by indications from the Federal Reserve about not lowering interest rates soon. The dollar index rose by 0.2% to 103.96, following a 0.36% increase on Thursday. A robust U.S. dollar generally leads to higher costs for metals priced in dollars, affecting international buyers who use other currencies.
Additionally, U.S. President Donald Trump invoked emergency powers to boost domestic production of critical minerals, including lithium and nickel, to address China’s dominance and meet future demands for electric vehicle batteries. In the broader market, prices for other metals were also affected, with aluminum down 0.4% to $2,649.5 per ton, lead decreasing by 0.7% to $2,042, and zinc falling 0.3% to $2,911. Nickel reduced by 0.6% to $16,180, while tin saw a decline of 0.7% to $35,100 in LME trading.
Within the Shanghai Futures Exchange (SHFE), copper prices decreased by 0.3% to 81,110 yuan ($11,252.64) per ton. Aluminum also fell by 0.3% to 20,775 yuan, while zinc increased by 0.1% to 23,775 yuan. Lead dropped 1.3% to 17,435 yuan, and nickel reduced by 0.7% to 129,370 yuan, whereas tin increased by 0.6% to 280,710 yuan. Exchange rates placed at $1 equals 7.2463 Chinese yuan renminbi highlight the competitive nature of commodity pricing globally.
Overall, copper prices have been negatively impacted by a stronger U.S. dollar, which coupled with the news of China’s potential stockpiling plans, did little to support prices. Market reactions were subdued due to the lack of concrete details about China’s purchasing strategy. As geopolitical factors and domestic policies in the U.S. influence the metals market, ongoing trends in supply and demand for industrial metals will remain critical in shaping future price movements.
Original Source: www.tradingview.com
