Copper Prices Steady Amid Supply Constraints and Weak Dollar
Copper prices held firm on Wednesday, bolstered by tight ore supplies and a weakening U.S. dollar, though gains were limited by concerns over demand in China, the top consumer of the metal. At 0458 GMT, three-month copper on the London Metal Exchange (LME) rose 0.5 percent to $9,720 per metric ton, while the most-traded July copper contract on the Shanghai Futures Exchange increased by 0.3 percent to 78,780 yuan ($10,857.37) per ton.
Anglo American reported on Tuesday that copper output at its Los Bronces mine in Chile is projected to drop by nearly a third from historical averages next year due to maintenance-related shutdowns of a processing plant.
The ongoing shortage of mined copper has significantly contributed to the price rally this year. However, record high prices have dampened copper consumption in China. Disappointing economic data this week has further fueled concerns about demand.
ANZ analysts noted that falling spot demand in China has led to substantial exports, pushing up LME stocks, which reached their highest level since January on Monday. Major copper smelters had planned to export up to 80,000 tons of copper in June. However, actual volumes may fall short due to recent reductions in export profits, according to the Shanghai Metal Exchange.
The U.S. dollar stabilized on Wednesday, recovering from losses following the release of U.S. retail sales data that reinforced expectations of an imminent rate cut by the Federal Reserve. A weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies, supporting demand.
In other metals, LME aluminum edged up 0.3% to $2,493.50 a ton, zinc gained 1.1% to $2,868, lead increased by 2.1% to $2,237.50, and tin was slightly up by 0.1% at $32,165. Conversely, nickel dropped 0.3% to $17,245 a ton.
