FX.co ★ Copper Pressured by Supply Concerns

On Thursday, copper prices remained below $5.85 per pound, following a significant decline of nearly 4% in the previous trading session. This downturn has been attributed to an increase in supply from China, the world’s largest consumer of copper. According to industry forecasts, China's refined copper production is anticipated to rise by approximately 5% this year, after experiencing a 10% increase the prior year. Additionally, growing inventories in major trading centers, notably in the London Metal Exchange (LME) warehouses in Asia, have put further pressure on copper prices. This suggests that supplies originally intended for the U.S. market may have been redirected. On the demand front, Chinese fabricators and manufacturers reduced their copper purchases for the second consecutive day on Wednesday, as businesses begin preparations for the upcoming Lunar New Year celebrations. Furthermore, earlier interest in purchasing commodities at lower prices diminished, exacerbated by renewed selling pressure on precious metals, particularly gold and silver.