LONDON: Copper prices retreated on Thursday on concerns about the latest developments in the war in Ukraine, a firmer dollar and worries about demand in China.
Three-month copper on the London Metal Exchange (LME) fell 0.3% to $9,062 per metric ton in official open-outcry trading.
LME copper has shed 11% since touching a four-month peak on Sept. 30, due to worries about demand in top metals consumer China and a strong dollar in the wake of Donald Trump’s US election victory. “Markets are nervous about quite a few things at the moment,” said Nitesh Shah, commodity strategist at WisdomTree.
Tensions in Ukraine have unsettled financial markets in recent days and on Thursday Russia launched an intercontinental ballistic missile during an attack on Ukraine in the first known use in the war of such a powerful weapon.
Earlier this week Ukraine fired US and British missiles at targets inside Russia. The metals markets have also been disappointed about the scope of stimulus unleashed so far by China to boost its sluggish economy. “China’s got to make some policy decisions, you’ve got the geopolitical risk in Ukraine and there’s proposed tax policies in the US and the knock-on impact on interest rate policy,” Shah said. “That’s quite a few unknowns, so that’s why we may see the base metals complex range trading before we get some answers.”
A Reuters poll of economists showed the United States could impose nearly 40% tariffs on imports from China early next year, potentially slicing growth in the world’s second-biggest economy by up to 1 percentage point.
The most-traded December copper contract on the Shanghai Futures Exchange closed up 0.1% at 74,440 yuan ($10,281.06) a ton. Also weighing on the market was a firmer dollar index, making greenback-priced metals more expensive for buyers using other currencies. Among other metals, LME aluminium eased in official activity by 0.7% to $2,625 per ton, lead fell 0.7% to $2,006, tin lost 0.4% to $28,905 while zinc added 0.2% to $2,992 and nickel rose 0.4% to $15,975.
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