On Monday, copper prices went down amid a slowdown in economic growth and demand in the metal’s top consumer, China.
Copper futures for July delivery declined by -0.14% to $3.99 a pound on April 24’s Asian afternoon session.
The Asian nation is anticipated to control the issues that affect the commodity’s demand and prices. However, it struggled to manage its momentum of it earlier this year.
According to analysts, positive factors that markets seemed to be pricing in early January are looking more unlikely to materialize. This came after indicators hinted at a mixed recovery in China. Also, a 19.00% decline in March output imports from China can worsen the situation.
They added that the slow effects of European monetary policy and challenging outlooks in the US weighed on copper prices.
Based on global surveys of manufacturing purchasing managers, they point toward weak demand for industrial materials.
As mentioned by experts, the metal rallied in China when its government opened the economy in December. Nonetheless, the upsides subsided as fundamentals in the physical market needed to catch up.
Moreover, a rise in copper production in Latin America, which will boost supplies, harms prices. In Peru, its government anticipates their production to rise by 15.00% in 2023 after recent protests restricted outputs.
Higher Outputs Lowered Copper Prices
According to National Bureau of Statistics data, China’s improved March copper production rose. The jump equals a 9.00% year-on-year to a record high of 1.05 million tons.
Based on the official data, the average metal output daily stood at 34,000.00 tons over March.
Furthermore, copper prices, which is usually seen as an economic pacesetter, were pressured by the latest data from the US. It shows a slowdown in labor market momentum and weaker retail sales and manufacturing activity.
While negative economic outlook was bound to weigh on prices, there are some factors may still bring more robust costs. These include record-low inventories, supply limitations, and expected demand growth.