(Bloomberg) -- Copper declined for a third consecutive session as China’s sputtering economy and a strong dollar keep pressure on industrial commodities.
Futures dropped as much as 2.4% on the London Metal Exchange, trading at a two-month low. Uncertainty over what Donald Trump’s return to the White House will mean for the global economy has also weighed on metals.
In its latest move to support growth, China plans to cut taxes for home purchases. While that signals more willingness to use fiscal tools, the government’s earlier steps have broadly disappointed investors looking for more sweeping stimulus.
“Chinese stimulus was not quite as people expected and I still think it’s hard for the government to pull off a package that is really bullish for base metals,” said Bank of America head of metals research Michael Widmer.
Meanwhile, the dollar’s ascent has made metals more expensive for buyers in other currencies. Traders have bet that Trump’s trade policies will boost the greenback, while the Federal Reserve’s recent interest rate cut has also provided support.
“Our view is that Trump’s policies – in particular higher tariffs and pro-cyclical fiscal policy – will lead to substantial appreciation of the dollar,” said Jonas Goltermann, deputy chief markets economist with Capital Economics.
Copper fell 2% to $9,145.50 a ton by 16:30 p.m. in London. Aluminum, zinc and nickel also dropped. The Bloomberg Dollar Spot Index rose 0.4% to its strongest level since November 2022.
--With assistance from Haidi Lun, Andy Clarke and Katharine Gemmell.
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