Copper headed for the biggest weekly loss since May as high energy costs and China’s stuttering industrial sector threatened to curb demand, according to Eddie Spence.
Futures on the London Metal Exchange rose above $14,300 a ton on Friday as the dollar dipped, but were still set to finish the week about 2% lower. Gains in oil prices driven by latest developments in the US-Iran war, as well as data indicating industrial weakness in top consumer China, have weighed on the metal in recent sessions. Still, prices are consolidating at relatively high levels with a broader backdrop of supply tightness.
The threat of US tariffs on refined metal has seen traders shift hundreds of thousands of tons to America, threatening shortages elsewhere. A major mine in Chile is also facing strike action. The upside for base metals may be limited, as long as the Middle East war lingers, analysts from Bank of America Corp. wrote in a note. “That said, we acknowledge that falling aluminum, copper and nickel supply should give support to prices.”
US jobs data for September, which is expected to show a sharp slowdown in hiring, is due later on Friday. That should reduce the case for more monetary tightening by the Federal Reserve this month, which is potentially positive for copper. Copper rose 0.5% on the LME to $14,313.50 a ton as of 11:58 a.m. Singapore time.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing