The copper prices rose on Monday, but the poor prospects for demand, especially in China, the main consumer of the metal, the expectations of further increases in interest rates in the United States, the strength of the dollar and the increase in inventories weighed on the confidence.
Copper stocks in LME-registered warehouses, at 143,775 tonnes on Friday, have risen 40% since September 15.
However, concerns about the availability of copper in the LME system have resurfaced due to the increase in the cancellation of metal purchase orders destined for delivery to 8.4% of total inventories, compared to 4.8% from Thursday.
This, according to traders, is behind the rise in the price of copper on the London Metal Exchange (LME), which was up 1.4% at US$7,561 a tonne at 0950 GMT.
China has been actively trying to stimulate the economy, but economic data continues to show slowing growth. Manufacturing Purchasing Managers’ Surveys (PMI) also show a faster-than-expected contraction.
The US employment report for September showed an increase of more than a quarter of a million jobs, a falling unemployment rate and continued healthy wage growth.
Traders increased bets that the Federal Reserve would raise benchmark interest rates by 75 basis points for the fourth time in a row at its meeting on November 1-2. This has pushed the dollar index towards a 20-year high recorded last month.
A stronger US currency makes commodities priced in dollars more expensive for holders of other currencies, weighing on demand.
Among other industrial metals, lead fell 1.1% to $2,048, aluminum fell 0.8% to $2,280, zinc was little changed at $2,991, tin gained 2.7% to $19,950. and nickel fell 0.2% to US$22,445 a tonne.
With information from Reuters
Source: Elcomercio
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