Fri, March 29, 2024

Chinese fears of commodities price caps decrease copper

Copper had fallen for 14 days

Copper prices slipped on Monday on concerns that top metals consumer China desires to put a lid on rising commodity prices to manage off potential inflation.

Concern regarding wavering demand and increasing copper inventories also showed on the market.

Benchmark copper on the London Metal Exchange (LME) had declined 0.9% to $8,845 a tonne by 1600 GMT.

Copper has increased nearly 30% over the past five months, having reached a 9-1/2 year peak of $9,617 in late February.

Ole Hansen, head of the commodity strategy at Saxo Bank in Copenhagen, stated that the real focus right now is that very high PPI (producer price index) numbers, both from China and the U.S., and China probably implementing measures to control commodities-led inflation.

In March, Chinese factory gate prices (PPI) grew at their fastest yearly pace in almost three years, and data presented on Friday.

Chinese Premier Li Keqiang stressed the need to strengthen raw materials’ market regulation to ease enterprises’ cost pressure amid growing global commodities prices. China’s official Xinhua news agency published on Sunday.

Metals markets had greeted U.S. President Joe Biden’s plan to pay $2.3 trillion to upgrade U.S. infrastructure, but Republicans have been wary.

Hansen stated that he thinks there’s also actually a lot of uncertainty associated with whether Biden will be ready to get his infrastructure bill through.

LME copper inventories MCUSTX-TOTAL reached their most distinguished in five months on Monday, having more than doubled after the start of March.

Also showing on the market were indications of weak demand in China as the Yangshan copper premium SMM-CUYP-CN dropped to $51 a tonne, its weakest since Nov. 20.

Russia’s Nornickel stated on Monday that it would completely restart operations this month – earlier than beforehand expected – at one of two significant mines cracked by flooding.

LME nickel dropped 3% to $16,135 a tonne.

LME aluminium decreased 0.3% to $2,258 a tonne, lead fell 0.2% to $1,974, zinc slump 2.6% to $2,757 and tin declined 0.4% to $25,665.

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