LONDON: Copper prices in London headed for the third weekly fall on Friday and broke below a major level of $10,000 per metric ton after mixed trade data from top metals consumer China.
Three-month copper on the London Metal Exchange lost 1.7% to $9,972.50 per ton by 1017 GMT. The metal is down 0.6% this week, having shed 10% since hitting a record high of $11,104.5 on May 20.
“We had a big rally recently but there were lots of signs that the physical market was not particularly strong, so this pull-back makes sense,” said Dan Smith, head of research at Amalgamated Metal Trading.
In China, indicators remain mixed. The country’s May trade data on Friday showed better-than-expected exports, suggesting factory owners were managing to find buyers overseas. However, imports increased at a slower pace, highlighting the fragility of domestic consumption.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange are at over four-year high after a surge since the start of 2024. They rose 4.7% this week.
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“Historically, copper stocks at SHFE exchanges start to decline from the second half of March with the second quarter seasonally the strongest for copper demand,” said ING commodities analyst Ewa Manthey.
Unwrought copper imports last month came in higher than expected, adding to concerns that inventories in China would rise further.
“We believe copper prices are due a downward correction, unless the Chinese government unveils sustained stimulus measures, or we see Chinese smelters cutting output,” Manthey added.
In terms of wider prospects for growth-dependent metals, investors awaited a key U.S. jobs report due later in the day for clues on when the Federal Reserve would start cutting interest rates.
On the technical front, copper is squeezed between its 21-day and 50-day moving averages at $10,271 and $9,865, respectively.
LME aluminium fell 0.7% to $2,629.50 a ton, zinc slid 0.4% to $2,895, lead shed 0.4% to $2,232, tin rose 0.5% to $32,265 and nickel lost 1.1% to $18,315.
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