Copper prices fall – Markets
LONDON: Copper prices fell on Wednesday as rising inflation left investors feeling risk-free, offsetting the impact of potential supply disruptions in America’s premier producing region. South.
The three-month benchmark copper on the London Metal Exchange (LME) fell 3.2% to $ 10,077 a tonne at 5:06 p.m. GMT.
The metal, widely used in the energy and construction industries, was on track for its biggest daily drop since February. Copper last week hit a record $ 10,747.50 per tonne and has jumped 32% so far this year.
“A lot of good news has already been incorporated into the price of copper,” said Julius Baer analyst Carsten Menke, citing the moderate impact of the potential for royalty increases and strikes in Chile and in a socialist party leading polls in Peru, on prices.
He said the metal’s supply and demand dynamics were positive relative to other metals, making copper less vulnerable to a significant price correction from record highs.
News that China plans to strengthen both supply and demand management to curb “unreasonable” increases in commodity prices and prevent pass-through to consumers has also pushed metals down.
Global stocks slipped and the dollar strengthened as a threat of unwanted inflation prompted investors to shy away from assets considered vulnerable to any removal of monetary stimulus.
Citi expects copper prices to trade above $ 12,000 a tonne over the next 3-4 months, amid a “supercycle” fueled by the bank’s expectation of strong margins of producers over the next five years.
Yangshan’s copper premium, which reflects Chinese demand for the imported metal, rose for the first time since February on Monday to $ 38.50 per tonne, rebounding from a more than five-year low of $ 37 per tonne reached on Friday.
The LME copper sank in a deep contango, indicating an abundant supply.
The LME liquid copper discount on the three-month contract rose to $ 28.75 per tonne, the largest since June 2020, from a premium of $ 30 per tonne last month.
Aluminum LME fell 2% to $ 2,428 per tonne, zinc fell 3.1% to $ 2,961, lead fell 1.4% to $ 2,197, tin lost 2.2% to $ 29,775, while nickel fell 3.4% to $ 17,350.