Key Takeaways
- Copper prices declined despite early gains from Chinese restocking.
- A strong dollar and rising oil prices offset market concerns over tight supplies.
- Strikes at major copper mines in Chile and the Philippines contributed to price volatility.
Copper prices fell on Thursday, reversing early gains, as a strong US dollar and rising oil prices outweighed concerns over tight supplies and expectations of Chinese restocking.
Benchmark three-month copper on the London Metal Exchange dropped 0.4% to $14,415 a metric ton, having earlier reached its highest level since September 25 at $14,646.50.
CRU principal analyst Craig Lang noted that early expectations of Chinese buyers restocking after their week-long holiday provided some support, but low market stocks and mounting mine supply risks kept prices under pressure.
The Yangshan premium, a measure of China’s appetite for copper imports, surged 5% to $125 a ton, its highest since November 2022, reflecting increased demand.
However, a firmer dollar, which made dollar-denominated metals more expensive for investors using other currencies, sent the entire LME complex lower, with the US currency approaching its strongest level in 18 months.
Strikes at major copper mines in Chile and the Philippines also contributed to price volatility. Workers at Antofagasta’s Centinela copper mine in Chile are on strike, while BHP requested government mediation to avert a strike at the Escondida copper mine, the world’s largest.
In the Philippines, copper and gold miner Philex Mining Corporation announced that a union of workers had voted to strike at its Padcal mine, accounting for nearly 5.5% of global copper mine production.
LME copper stocks remained tight, with 3,325 tons of orders for metal withdrawals from warehouses. The cash LME copper contract traded at a premium of $107.50 a ton over the three-month forward, up from $89 on Wednesday, indicating growing near-term supply tightness.
Elsewhere, aluminium fell 1.6% to $3,068.50 a ton, touching a three-month low, while zinc slipped 0.7% to $3,736 and lead lost 1.2% to $1,873. Nickel shed 0.9% to $15,590 and tin was down 2.5% at $52,950 after touching its weakest since September 17 at $52,860.
