Copper Prices Dip Amid Dollar Strength and Uncertainty Over China’s Economic Plans
Copper prices fell on Tuesday as the dollar strengthened, and uncertainty loomed over China's economic recovery following weak economic data and a lack of details regarding Beijing's stimulus efforts. The three-month copper contract on the London Metal Exchange (LME) declined by 1.2%, trading at $9,547 per metric ton by 0722 GMT, marking its lowest point in three weeks.
In China, the most actively traded November copper contract on the Shanghai Futures Exchange (SHFE) dropped by 1.3% to 76,520 yuan ($10,747.34) per ton. The stronger dollar, which hovered near its highest level in over two months, contributed to making dollar-priced metals more expensive for holders of other currencies.
Recent data from China, including September's trade and new lending numbers, fell short of expectations, and another report indicated worsening deflation in producer prices. While China pledged to "significantly increase" debt over the weekend, specifics regarding the size and timing of the proposed stimulus package were absent.
Kelvin Wong, a senior market analyst at OANDA for Asia Pacific, noted, "Investors are going to see how Chinese policymakers navigate their economic playbook. If we get a clear figure on the size of the stimulus and not just reiterations, then copper prices could rise." Investors are keeping a close eye on the upcoming Standing Committee of the National People's Congress meeting later this month, where Beijing may reportedly raise an additional $850 billion through Treasury bonds over the next three years.
Other base metals also saw declines. On the SHFE, aluminum slipped by 1.3% to 20,605 yuan per ton, nickel fell by 1.9% to 132,680 yuan, zinc dropped by 2.1% to 24,955 yuan, lead decreased by 1.6% to 16,505 yuan, and tin was down by 1.5% to 264,110 yuan. On the LME, aluminum edged down by 1.4% to $2,557 per ton, nickel lost 1.4% to $17,415, zinc declined 2.1% to $3,018.50, lead dropped 1% to $2,043.50, and tin fell 1% to $32,125.
