Key Takeaways
- Copper prices fell 0.2% to $14,595 a metric ton.
- Supply worries from Chilean mines limited the decline.
- The stronger US dollar made copper more expensive for buyers.
Copper prices edged down on Thursday, dipping 0.2% to $14,595 a metric ton by 1405 GMT, according to the London Metal Exchange. This slight decrease was influenced by a firmer US dollar and risk reduction ahead of a long Chinese holiday weekend.
Despite the decline, copper prices have seen a 9% increase so far this quarter, having reached a record high of $14,875 a ton two weeks ago. The metal, crucial for power and construction, remains a key focus in global markets.
Financial markets in China, the world's largest consumer of copper, have been closed for the Mid-Autumn Festival, with trading resuming on Monday. This closure has dampened immediate trading activity but does not significantly impact the overall market sentiment.
The stronger US dollar, which has risen to near a two-month high, made copper more expensive for buyers using other currencies. Additionally, the prospect of higher interest rates by the Federal Reserve affected the sentiment towards growth-dependent metals such as copper.
China's stock markets experienced their biggest one-day decline in a month, as investors remained skeptical about a potential breakthrough in the ongoing trade talks between US President Donald Trump and Chinese President Xi Jinping in Washington.
Supply concerns in the copper market were further heightened by operational disruptions at BHP’s Escondida mine in Chile, the world’s largest copper mine. The mine’s operations were suspended after a worker was killed in an accident.
Two unions representing workers at Antofagasta Minerals’ Centinela copper mine in Chile called for a strike vote amid ongoing contract negotiations, adding to the supply uncertainties in the market.
Other metals in the London Metal Exchange also saw mixed movements. LME zinc rose 0.5% to $3,919 a ton, while LME aluminium slipped 0.3% to $3,247. Nickel and lead saw minor losses, with tin remaining stable at $53,920.
The premium of the LME cash copper contract over the three-month benchmark widened to $107.5 a ton, the highest since September 1, signaling tightness in nearby supply. This premium reflects the market’s concern over supply disruptions and the ongoing negotiations with workers at major Chilean mines.
