METALS-Copper extends losses on firm dollar, growth worries

By Reuters / September 27, 2022 / / Article Link

(Recasts with updated prices) By Pratima Desai LONDON, Sept 27 (Reuters) - Copper prices extended theirdowntrend on Tuesday on worries about global growth and demanddue to interest rate hikes, a stronger dollar and climbinginventories. Earlier, copper bounced as the dollar weakened, but thedollar index reversed higher after upbeat U.S. data,including an unexpected rise in new home sales. Benchmark copper on the London Metal Exchange (LME)had slipped 0.3% to $7,317.50 a tonne by 1615 GMT. It fell to$7,292 a tonne on Monday, a drop of 32% since hitting a recordhigh of $10,845 a tonne in March and the lowest since July 21. U.S. Comex copper futures dipped 0.03% to $3.29 alb. "Markets are trading the macro at the moment and copper isno exception. Any weakness in the dollar will trigger a reliefrally, even if only in the short term," said Sucden Financialanalyst Geordie Wilkes.

"But given the weak fundamentals, we expect copper prices tocontinue to trend lower." The stronger dollar makes dollar-priced commodities moreexpensive for holders of other currencies, which could help sapdemand if the trend persists.

This relationship is used by funds which trade usingshort-term buy and sell signals from numerical models. Weighing on copper are expectations of shrinking demand forthe metal in Europe due to a manufacturing recession caused bythe energy crisis. Clues to demand prospects will also come on Friday fromsurveys of purchasing managers at manufacturers in top metalsconsumer China, where COVID lockdowns have significantlyundermined industrial activity. Copper stocks in LME-approved warehouses, at130,850 tonnes, are up nearly 30% since Sept. 15, and cancelledwarrants - metal earmarked for delivery - at 7% are down from50% in late August. Both have eased concerns about availabilityon the LME market. LME lead prices edged up 0.1% at $1,756.50 a tonne,not far from two-year lows of $1,748 a tonne hit on Monday.

Expectations of sliding demand for the battery material fromthe auto sector, despite the approach of winter when demand forreplacement batteries typically rises, are behind the sell-off.

Aluminium eased 1% to $2,118 a tonne, zinc slipped 2.2% to $2,858.50, tin dipped 0.2% to $20,610and nickel dropped 2.7% to $21,610. (Reporting by Pratima Desai; Additional reporting by EricOnstad; Editing by Jan Harvey, Kirsten Donovan, Maju Samuel andShailesh Kuber)

LME price overview COMEX copper futures All metals news All commodities news Foreign exchange rates SPEED GUIDES )) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Recent News

Battery Metals Revert to Trend

June 05, 2023 /

Gold stocks rise on overall equity market exuberance

June 05, 2023 /

Eskay | Dr. Quinton Hennigh (May 19th, 2023)

May 25, 2023 /
See all >
Share to Youtube Share to Facebook Facebook Share to Linkedin Share to Twitter Twitter Share to Tiktok