Demand doubts and dollar dent copper sentiment
- "China's economy and demand is slowing, the dollar isn't helping and Chinese authorities are intent on making sure the market understands what they want"
LONDON: Copper prices slipped to four-week lows on Monday as sentiment was dominated by a stronger dollar and worries about demand in top consumer China and plans to release copper and other industrial metals from Chinese reserves.
Benchmark copper on the London Metal Exchange (LME) was down 3% at $9,143 a tonne by 1244 GMT. Prices of the metal used in the power and construction industries touched its lowest since June 21 at $9,131 on selling after the New York market opened.
"China's economy and demand is slowing, the dollar isn't helping and Chinese authorities are intent on making sure the market understands what they want," one copper trader said.
Traders said that rising cases of the Delta variant of COVID-19 and the potential for economic disruption had added to the gloomy outlook for industrial metals.
DOLLAR: A rising US currency makes dollar-priced metals more expensive for holders of other currencies, which could subdue demand.
CHINA: A drop in China's copper imports for a third month running in June spooked the market.
Sentiment was also undermined by its GDP expanding at a slower than expected pace in the second quarter.
RESERVES: China will strengthen commodity price monitoring and continue to release copper, aluminium and zinc from state reserves in batches, the National Development and Reform Commission (NDRC) said.
China sold 20,000 tonnes of copper, 50,000 tonnes of aluminium and 30,000 tonnes of zinc from its reserves on July 5.
CRACKDOWN: A Chinese government official also reiterated on Saturday that China would crack down on hoarding and commodities speculation while ensuring supplies and prices are stable.
INVENTORIES: Also weighing on prices are stocks of copper in LME-registered warehouses at 226,300 tonnes, more than double the levels in the middle of May.
Tin near record on supply concerns, nickel jumps to 5-month high
Stocks in China's bonded warehouses - at 435,500 tonnes - have also been climbing since February, suggesting surpluses.
OTHER METALS: Aluminium was down 2.1% at $2,435 a tonne, zinc fell 2% to $2,943, lead ceded 1.6% to $2,282, tin lost 0.6% to $33,400 and nickel was down 1.1% at $18,865.
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