On Thursday, copper prices declined to their lowest level in over two weeks amid concern about weak Chinese industrial profits.
Copper futures for September delivery went down by -1.15% to $3.70 per pound on June 29’s Asian afternoon session.
Besides, China is a top consumer of the metal. As a result, it negatively affected its prices greatly.
The London Metal Exchange (LME) dropped by 1.00% to $8,277.00 per metric ton. It marked the weakest price since June 12. According to analysts, the unfavorable data from China weighs on the pressure that started on Friday, breaking highs from May.
They added that traders were running after the copper market for the past three weeks. However, they were caught wrong again when the market failed to its upside on Friday.
Furthermore, the global exchange for the commodity’s stocks slipped to 15-year lows. Therefore, it raised concerns about supply. Mainly, the issue was about if China would start recovering their demand.
In addition, the problem still did not impact Chinese spot prices. Its copper concentrate treatment charges remained over a four-year high of $89.50 per ton.
Moreover, Beijing’s industrial firms witnessed a double-digit percentage decrease in their yearly incomes in 2023’s first five months. As base metals are usually used in different economic sectors, weaker factory activity worries future demand.
Dollar Strength Drags Copper Prices
Investors raised doubts regarding the implications of more robust US data, which pulled down copper prices. It displayed a housing market strength recovery as consumer confidence reached a 17-month high.
The rally in the dollar can be connected to the latest remarks from US Federal Reserve’s Chairman, Jerome Powell. He made opportunities for more interest rate hikes during the following meeting. Also, he stated that two rate hikes could take place this year.
According to analysts, the domestic copper supply is anticipated to recover after July. However, they warned that negative pressure could happen in the future. They also highlighted the dull medium- and long-term macroeconomic guidance.
