Copper prices eased on Thursday as concerns over supply from South America receded and seasonally weak demand in top consumer China resurfaced.
Three-month copper on the London Metal Exchange fell 1% to $6,373.50 a tonne in official trading.
COVID-19 supply disruptions in top producer Chile and flooding in China helped propel copper to a two-year high in July but miners in the South American nation were ramping back up while neighbouring Peru was also restarting production after lockdowns.
“With supply concerns in Chile and Peru subsiding and the effects of China’s fiscal impulse largely already felt, sentiment for copper has incrementally weakened,” said BMO Capital Markets analyst Tim Wood-Dow.
The copper market returned its focus to fundamental data, leading it to trade in a narrow range of between $6,400-$6,500 for nearly six weeks, Commerzbank analysts said.
COPPER DEMAND: The Yangshan copper premium SMM-CUYP-CN, an indicator of Chinese demand, stood at around $78 a tonne, its lowest since April and down from $99 a month ago.
INVENTORIES: Weaker Chinese demand can be seen through rising copper stocks in ShFE warehouses CU-STX-SGH, while a decline in inventories in LME warehouses MCUSTX-TOTAL lent prices some support.
The third quarter is seen as a traditionally seasonally weak period for Chinese demand, analysts say.
U.S STIMULUS: The U.S. Republican White House and congressional Democrats have been in a deadlock for days trying to come up with a U.S. coronavirus bill.
Prices were also pressured by U.S.-China tensions ahead of a crucial weekend meeting between trade officials from both countries.
CODELCO SUPPLY: Chile’s state-run miner Codelco, the world’s largest copper producer, expects quick progress in ramping up processing capacity at its Chuquicamata underground project.
PRICES: Aluminium edged down 0.7% to $1,774 a tonne, zinc shed 1% to $2,382.50, lead fell 0.6% to $1,946, tin was steady at $17,588, while nickel eased 0.5% to $14,186.
Source:Reuters
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
Please Contact Us at：
media@xindemarine.com
