Key Takeaways
- Copper prices fell to a 10-day low on Monday.
- Rising oil prices and a strong US dollar impacted the industrial metals market.
- Benchmark three-month copper on the London Metal Exchange dropped 1.06%.
Copper prices hit a 10-day low on Monday, reflecting a downturn in the industrial metals market. The decline was driven by rising oil prices and a strengthening US dollar, which made copper more expensive for holders of other currencies.
On the London Metal Exchange, the benchmark three-month copper price fell 1.06% to $14,467.50 a metric ton by 0332 GMT, reaching its lowest point since September 18 at $14,440.
In China, the Shanghai Futures Exchange witnessed a similar trend, with the most-traded copper contract dropping 0.72% to 109,420 yuan ($16,296.08) a ton. This marked its lowest point since September 18, having declined as much as 0.91%.
The rise in oil prices, following the US rejection of Iran’s peace deal, added to the pressure on copper prices. US President Donald Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz and end the conflict kept concerns over oil supply disruptions alive.
The US dollar’s strength also played a significant role, hovering near a two-month high. A stronger dollar makes greenback-priced metals more expensive for holders of other currencies, contributing to the decline in copper prices.
Industrial profits in China slowed to 4.2% year-on-year in August from 11.2% in July, according to official data. While downstream users are expected to restock ahead of the seven-day National Day holiday, high copper prices and elevated spot premiums may limit demand.
Among other LME metals, aluminium, zinc, lead, nickel, and tin also experienced declines, with aluminium falling 0.98%, zinc dropping 1.10%, lead losing 0.62%, nickel slipping 0.42%, and tin falling 1.72%.
On the Shanghai Futures Exchange, aluminium, zinc, lead, nickel, and tin also saw declines, with aluminium falling 0.68%, zinc dropping 0.97%, lead losing 0.77%, nickel declining 1.18%, and tin shedding 1.19%.
Jinrui Futures noted that domestic copper premium stood at 1,315 yuan a ton as of Thursday before the Mid-Autumn Festival holiday, just below a weekly peak of 1,375 yuan.
