HomeMarket NewsCopper Hits 11-Month Lows Amid Weak China Demand and Rising Inventories

Copper Hits 11-Month Lows Amid Weak China Demand and Rising Inventories

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In a stark decline, copper prices have dropped to their lowest point since November last year. Multiple factors have contributed to this downturn, including China’s property market issues, diminished hopes for stronger stimulus from China, and ongoing conflicts in the Middle East. These concerns have heavily influenced market sentiment.

The London Metal Exchange’s benchmark copper (HG1:COM) recently traded at $7,875 per metric ton, down 0.9% and reaching as low as $7,856 earlier in the day. This marks a significant decrease and is the lowest level observed since November 28. Notably, industrial metals are following suit with China’s blue-chip stock index, which recently reached a four-and-a-half-year low.

Traders have identified a couple of key factors contributing to this decline. Firstly, copper inventories in warehouses monitored by the Shanghai Futures Exchange have risen, putting pressure on the market. Additionally, LME-tracked stockpiles of copper have surged to the highest levels seen since October 2021.

Furthermore, the electric vehicle sector’s use of copper is closely watched, with Tesla viewed as a key indicator. The recent dialing back of growth expectations by Tesla has also impacted the market negatively.

Another element weighing on industrial metals is the strengthening of the U.S. dollar. When the dollar gains value, it makes dollar-priced metals more expensive for holders of other currencies.

Investors and traders should monitor these developments carefully, as they continue to shape the copper market and influence investment decisions. Amidst these challenging conditions, it is essential to stay informed and seek guidance from trusted sources.

Key Stock Tickers and Related Companies:

  • COPX
  • JJC
  • SCCO
  • HBM
  • TECK
  • ERO
  • BHP
  • RIO

As the copper market continues to face headwinds, it is crucial to keep an eye on these stocks and their performance.

Close-up of new and shiny сopper pipe.

Image by SimoneN/iStock via Getty Images

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