Copper Prices Rise as Dollar Eases, Market Weighed by China Concerns
Copper prices edged higher on Tuesday as the U.S. dollar rally paused, although concerns over demand from China and potential U.S. tariffs continued to weigh on the market. Three-month copper on the London Metal Exchange (LME) rose 0.5% to $9,114.50 per metric ton by 0320 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange (SHFE) gained 0.6% to 74,250 yuan ($10,266.44) per ton.
The U.S. dollar pulled back after a rally that had taken it to a one-year high, as traders locked in profits. A weaker dollar typically makes dollar-priced metals like copper cheaper for holders of other currencies, lending some support to the market.
China, the largest consumer of metals, has experienced slowing economic growth despite government policies aimed at reviving the economy. These measures have yet to significantly boost investor confidence. Additionally, U.S. President-elect Donald Trump has pledged to end China's most-favored-nation trading status and impose tariffs on Chinese imports, potentially exceeding 60%, which has added to market uncertainty.
"Most factors continue to be bearish for the copper market. LME copper prices will likely trade between $8,900 and $9,200 in the next six weeks," said Ed Meir, consultant at brokerage Marex. "For next year, I see $8,000 on the downside and $10,500 on the upside."
Last week, China's finance ministry announced a reduction or cancellation of export tax rebates for aluminum and copper products, which has also contributed to market movements.
Other base metals saw modest gains on the LME, with aluminum rising 0.7% to $2,626 per metric ton, nickel steady at $15,730, zinc adding 0.6% to $2,968.50, lead rising 0.4% to $1,998, and tin firming 0.8% to $29,260. On the SHFE, aluminum was flat at 20,550 yuan per ton, while nickel rose 0.5% to 124,530 yuan, tin advanced 1% to 243,080 yuan, lead was up 0.2% to 16,770 yuan, and zinc gained 0.9% to 24,775 yuan.
