LONDON: Copper prices fell in London on Thursday after solid US economic data pushed the dollar to fresh seven-week peaks and inventories in warehouses registered with the London Metal Exchange (LME) rose.
Three-month copper prices on the LME were down 1.7% at $8,164 a tonne by 1622 GMT. On Wednesday, copper briefly hit $8,088.5, its lowest since Nov. 30 before recovering as traders took profits on bets on lower prices, known as short positions.
“Copper has given back some of yesterday’s strong gains led by short-covering, as the dollar continues higher,” said Ole Hansen, head of commodity strategy at Saxo Bank.
The metal, which is used in electrical wiring, rallied early this year, hitting a seven-month high of $9,550.5 as China re-opened following stringent COVID-19 curbs.
But optimism faded when demand growth from the world’s top consumer of metals fell short of initial high expectations.
This week’s Chinese data showed April industrial output and retail sales grew more slowly than expected, reinforcing concerns of a spillover into the wider global economy.
Further pressuring prices, on-warrant copper stocks in LME-registered warehouses climbed to a six-month peak of 90,300 tonnes after arrivals of 3,900 tonnes.
Making dollar-priced metals more expensive for buyers holding other currencies, the greenback rose to fresh seven-week peaks after solid US economic data further pared back bets on easing by the Federal Reserve.
LME aluminium was down 0.5% at $2,284 a tonne, lead was up 0.2% at $2,059, while tin added 0.7% to stand at $24,985.
Zinc lost 2.7% to $2,456.5 after touching $2,453.5, a fresh low since Oct. 2020, and nickel fell 2.0% to $20,910, after hitting $20,895, its lowest since Sept. 5.
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