London Copper Prices Hold Steady Amid Weakening US Dollar
As of January 15, London copper prices remained stable, primarily influenced by a weakening U.S. dollar. The three-month copper on the London Metal Exchange was priced at $8,350 per metric ton by 0538 GMT, maintaining its position following a 1.5% drop last week.
The U.S. dollar's decline, spurred by anticipations of a Federal Reserve rate cut in March, comes after unexpected data showed a drop in U.S. producer prices last month. This weakening of the dollar makes it more affordable for traders to purchase commodities priced in the greenback.
China's Monetary Policy and Economic Data
China's central bank's decision to maintain its medium-term policy rate unchanged has defied market expectations for a cut. This decision is partly due to a weaker currency, limiting the scope for monetary easing to stimulate the economy. Investors are now awaiting the release of China's fourth-quarter GDP and December industrial production data, scheduled for Wednesday.
The most-traded February copper contract on the Shanghai Futures Exchange saw a 0.3% decrease to 67,860 yuan ($9,463.78) per ton. According to GF Futures analysts, the spot market in China is likely to remain tepid due to weaker-than-usual pre-holiday replenishment from end-users.
Impact of Mine Disruptions
Market stability is also influenced by disruptions on the mine side. The recent slump in copper charges in China, as smelters struggle for raw material, could further affect margins for Chinese firms and potentially reduce their refined copper production.
