Copper prices in London faced a notable decline this Friday, marking the largest weekly drop in four weeks. The cause behind this dip is the robust performance of the U.S. dollar and uncertain economic reports from significant nations, particularly China. Which has a substantial demand for copper.
During open-outcry trading, the price of three-month copper on the London Metal Exchange (LME) fell by 1% to $8,240 per metric ton. Over the course of this week, copper has experienced a 3.1% decrease.
John Meyer, the head of research at SP Angel in London, pointed out that metals like copper are predominantly influenced by fluctuations in the value of the U.S. dollar. Additionally, there is a mixture of reports regarding the state of manufacturing in China and other global regions.
Notably, the U.S. dollar did experience a decline on Friday but remains on a prolonged winning streak. The longest in nine years. This can be attributed to the robust performance of the U.S. economy.
On the contrary, China’s national currency, the yuan, has weakened significantly, reaching its lowest point since 2007. A weaker yuan makes U.S. dollar-priced metals less attractive to Chinese investors.
Commerzbank, a prominent bank, has downgraded its year-end copper price projection from $9,000 per ton to $8,800 per ton. The rationale behind this adjustment is the anticipation of reduced copper demand in China and the growing copper supply in stock exchanges.
In separate news, Peru, one of the world’s leading copper producers, reported a notable increase in copper production. In July 2023, it produced 17.7% more copper than in the same period in 2022.
However, in Panama, issues have arisen at a copper mine due to disputes between workers and management. Workers are demanding a larger share of profits and a higher salary.
Presently, negotiations have reached an impasse, raising concerns about a potential work stoppage at the mine.