Market Outlook: Copper Declines Amid Strengthening Dollar and Weak Demand from China

Copper prices fell, tracking the strengthening U.S. dollar and sluggish demand from China, the largest metal consumer. Three-month copper on the London Metal Exchange (LME) declined to $9,275 per ton, marking the lowest level since September 16. The December copper contract on the Shanghai Futures Exchange (SHFE) decreased by 0.8% to 75,920 yuan per ton ($10,500.26). While the dollar traded near a four-month high against its main rivals, Bitcoin extended its record rally as investors continued to lean towards trades expected to benefit from the new Donald Trump administration. Analysts stated that the dollar is likely to remain the primary factor influencing metal prices this week, as there has been little focus on the effectiveness of subsequent support from China. Investors are also concerned that President-elect Donald Trump’s threat to impose heavy tariffs on China could reduce metal demand. The next indicator of the strength of the Chinese economy will be the housing price data set to be released this Friday. On the LME, aluminum traded down 1% at $2,561 per ton, nickel fell 0.6% to $16,010 per ton, zinc declined 0.3% to $2,971.5 per ton, tin decreased 0.7% to $31,050 per ton, while lead saw an increase of 0.4% to $2,029 per ton.