Copper Falls on Firm Dollar, Rising Stockpiles

February 28, 2024, 03.06 PM | Source: Reuters
Copper Falls on Firm Dollar, Rising Stockpiles

METAL COMMODITY - HANOI. Copper edged down on Wednesday, as demand concerns stemming from a spike in inventories in Chinese exchange warehouses and a firm dollar weighed on prices.

Three-month copper on the London Metal Exchange (LME) fell 0.2% to $8,459 per metric ton by 0701 GMT, and the most-traded April copper contract on the Shanghai Futures Exchange (SHFE) dipped 0.1% to 68,760 yuan ($9,551.33) a ton.

Copper inventories in SHFE warehouses more than doubled in just over two weeks to 181,323 tons on Friday, the highest since March last year, suggesting Chinese demand has not made a strong recovery since the Lunar New Year holiday.

The dollar inched up as traders brushed off U.S. manufactured goods data and awaited clues on when the Federal Reserve may start cutting interest rates.

A stronger dollar makes greenback-priced metals more expensive to holders of other currencies.

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The copper price decline was limited on mine supply disruption and on hopes of demand recovery later in the quarter.

"The pace of consumption rebound after the year-end is slightly slower than usual, but it will still be a month-on-month recovery, and it is expected that the accumulation of inventory will slow down," broker Jinrui Futures said in a note.

LME aluminium dipped 0.2% to $2,187 a ton, nickel fell 1% to $17,290, zinc shed 0.7% to $2,404, lead declined 0.3% to $2,084 and tin lost 0.7% to $26,165.

SHFE aluminium edged down 0.3% at 18,790 yuan a ton, zinc eased 0.4% to 20,540 yuan, lead was nearly flat at 15,945 yuan, while nickel rose 0.8% to 134,290 yuan and tin advanced 0.2% to 216,070 yuan.

The cash LME zinc contract was traded at a steep discount to the three-month contract , at $46.70 on Tuesday - the biggest discount since at least 2009 - as inventories surged in LME warehouses.

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Editor: Wahyu T.Rahmawati

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