Copper stays close to three-week lows
Copper prices rallied on Thursday although they were operating near three-week lows as investors were keeping an eye on a trade dispute between Washington and Beijing that could reduce demand for metals in China, the world’s largest consumer.
The metal used in construction and power lines has fallen almost 8% from a maximum of more than four years that touched in early June. Fears of a trade war unleashed with the United States have raised concerns over the Chinese economic outlook after a growth data weaker than expected for May.
At 11:32 GMT, the benchmark copper on the London Metal Exchange (LME) gained 0.4% to US $ 6,803 per tonne, after falling five times in a row to US at five consecutive sessions. $ 6,772 per ton on Wednesday.
However, copper would probably fall further, said analyst Caroline Bain of Capital Economics. “We have a long-term view that China is slowing down in the second half of this year … so there is a fundamental reason for weaker copper prices,” he said.
“A lot depends on the news coming from the trade dispute between China and the US Any escalation in the tension is likely to cause copper prices to fall,” he added.
The surplus in the global refined copper market was 55,000 tons in March and 87,000 tons in February, the International Copper Study Group said. Meanwhile, Chinese data showed that refined copper production rose 15.5% year-on-year in May.
Metals were under pressure because of the strength of the dollar, which has appreciated to its highest level in almost a year, which has made the commodities quoted in dollars more expensive for buyers who use other currencies.