(Bloomberg) -- Copper headed for a seventh consecutive weekly fall, weighed by a weaker outlook for Chinese demand and a post-election dollar rally.
Futures on the London Metal Exchange have dropped almost 8% since Nov. 5. Concerns about demand recovery in China, the world’s top metals consumer, have led traders to look for clearer signs that the government will roll out more policies — such as infrastructure investment — that will boost commodities demand.
China’s copper importers are already reining in the amount of tonnage they buy for 2025 through annual supply contracts and opting for spot supplies instead, given the market’s state of flux, Bloomberg reported Thursday.
Also hitting copper has been a rally in the greenback following the re-election of Donald Trump, as traders bet on tighter-for-longer Federal Reserve policy.
Trump has promised to raise tariffs and cut taxes, both of which may add to inflationary pressure. The risks were underlined Wednesday, when an index of US consumer prices showed its first acceleration on an annualized basis since March.
“The reality is we’re likely finding a new range given a repricing in the dollar,” Nicholas Snowdon, head of metals research at Mercuria Energy Trading SA, said at CRU Group’s World Copper Conference in Shanghai. “But the structural story is not dead. It is still very much alive and we do see that starting to prevail more through the mid to second half of next year.”
Traders are watching the impact of China’s latest economic stimulus measures. Industrial output and retail sales in the world’s top metals consumer are expected to have grown at a faster pace in October than September, according to economists surveyed by Bloomberg. That data is due Friday.
Copper declined 0.5% on the LME to $9,004.50 a ton by 16:00 p.m. local time. Most other metals were lower, with zinc down 1% and aluminum holding steady. The Bloomberg Dollar Spot Index was also steady.
--With assistance from Katharine Gemmell and Andrew Janes.
©2024 Bloomberg L.P.